NLIS 22
March 30, 2004
(Finance)

 

Spending Within Our Means

Finance Minister Loyola Sullivan said today that Budget 2004 reflects the province�s real ability to pay for programs and services, noting that it is government�s responsibility to ensure that public money is spent in the most efficient and effective manner, and that every dollar is justified.

"The province has reached the point where it can no longer sustain current services at current levels within the available budget," said the minister. "Previous administrations used up all of the convenient, short-term financial strategies to meet their budget challenges. Now, our fiscal constraints require fundamental changes in the way government operates."

One of those changes will be to regain control of public sector expenditures over a reasonable time frame. In the Blueprint and in Budget 2004, government has outlined measures to achieve this goal. Representative examples of control measures adopted in Budget 2004 are addressed in this release.

"Structural changes such as consolidation of school boards and health boards, restructuring and streamlining of government departments and optimizing deployment of human resources within the public service are central elements of our approach," said the minister. "We are also seeking operational efficiencies throughout the system so that government can begin to spend within our means to pay."

Extreme weather conditions over the past number of years have made it impossible to keep some roads open and safe; in particular, the 83-kilometre section of road between Red Bay and Lodge Bay sees very little traffic and is impassible even by road clearing equipment for much of the winter. Therefore, winter maintenance will be suspended on this stretch of road until Phase III of the Trans Labrador Highway is complete and use of this route intensifies. Government will instead ensure access via well-maintained alternative transportation routes -- the airport and snowmobile trails.

Further, in recognition of their primarily recreational purpose, cabin access and class-four roads will no longer receive summer or winter maintenance so that scarce resources can be focused on maintaining the vital provincial highway network.

Currently, government subsidizes the cost of ferry services by approximately 90 per cent. While costs to provide the service have continued to rise year-over-year, rates have not increased in the past five years. To offset this imbalance, government will increase ferry rates on the island by 10 per cent this year and five per cent the following three years. Even with these increases, government is continuing to significantly subsidize ferry services. Changes will also be made to the Bell Island ferry schedule to reduce unsustainable overtime expenditures. Bell Island will continue to be serviced by both the Beaumont Hamel and the Flanders on a 12-hour shift per day (three fewer runs). Hours of service will continue from 5:55 a.m. to 11 p.m. daily.

Over the next three years, Municipal Operating Grants (MOGs) will be reduced by a total of $5 million. Fourteen larger municipalities will be initially affected, while small rural communities will remain at status quo levels. The province�s larger cities and towns currently receive almost half of the total MOG expenditures. These areas are growing and can generate their own operating revenue, whereas rural areas are typically challenged by declining populations and shrinking tax bases. Future decisions on how to allocate MOGs will continue to be based on fiscal capacity and financial stability of affected municipalities.

Over the next four years, the Newfoundland and Labrador Liquor Corporation will be requested to reduce its operating budget by $5 million.

Government will not ask others to accept expenditure control alone. It will lead by example, as was the case with streamlining of departments and reductions in the size of Cabinet and number of political staff.

"We are under no illusion of the scale of the task and the impact some budget decisions will have on our current way of doing things," said Minister Sullivan. "But, we must start now to spend within our means. We have set clear, fair and realistic goals in Budget 2004."

Media contact:
          Diane Keough, Finance (709) 729-6830
          Christine King, Transportation and Works (709) 729-1758
          Vanessa Colman-Sadd, Municipal and Provincial Affairs (709) 729-1983

2004 03 30                                         3:20 p.m.


SearchHomeBack to GovernmentContact Us


All material copyright the Government of Newfoundland and Labrador. No unauthorized copying or redeployment permitted. The Government assumes no responsibility for the accuracy of any material deployed on an unauthorized server.
Disclaimer/Copyright/Privacy Statement