Finance
April 26, 2007

Vision. Action. Budget 2007 �
A Significant Financial, Economic and Social Achievement

In presenting its fourth budget today, the Williams Government delivered a significant financial, economic and social achievement for Newfoundland and Labrador. Vision. Action. Budget 2007 represents the culmination to date of the Provincial Government�s efforts to stabilize the province�s financial situation while making strategic investments to encourage economic growth, expand social programs and services and modernize infrastructure. Some of the key highlights include: reduction of personal income tax rates; the creation of a business attraction fund; student loan relief; initiatives to stimulate rural economies; increased investments for health and education; and, a new Research and Development Strategy for the province.

"Our government has a clear vision for Newfoundland and Labrador and we are determined in our conviction to be a prosperous province with a self-reliant people," said the Honourable Tom Marshall, Minister of Finance and President of Treasury Board. "The actions we have taken continue to strengthen the foundation on which we will build a strong province and foster a people ready, willing and able to seize our opportunities and overcome our challenges."

In forecasting a surplus of $261 million, Budget 2007 is an affirmation of the direction the Williams Government has taken in leading Newfoundland and Labrador. Improved revenues and a strengthened economy, combined with fiscal responsibility, have given the province the capacity to make significant, yet prudent, investments in priority areas. These investments also reflect the increasing costs of delivering programs and services across a huge geography.

"The healthy financial position of the province provides our government with the means to make spending decisions that will result in long-lasting benefits," said Minister Marshall. "Our approach is to use our finite resource revenues today to build a strong economic base for future generations by investing to diversify and grow the economy."

Among the highlights of Budget 2007 are:

  • Reduction in personal income tax rates that puts more money into the hands of Newfoundlanders and Labradorians and increases the province�s competitiveness. These new tax rates will be the lowest in Atlantic Canada;
  • More than $100 million to attract businesses, to invest in programs to grow the economy, and to develop a highly-qualified, skilled workforce;
  • Investments in education that bring the level of spending to more than $1 billion for the first time in the province�s history;
  • An overall budget for health and community services of $2.2 billion that will introduce new programs, enhance services, and improve infrastructure;
  • Additional spending of $28.9 million for the Poverty Reduction Strategy. In total this year, $91 million will be spent on measures related to the strategy;
  • Another $440 million in infrastructure spending as part of the $2 billion, six-year infrastructure strategy announced last year. This spending will generate an estimated 5,700 person-years of employment;
  • A commitment of $55 million in new spending over the next five years for new initiatives in Labrador as part of the Northern Strategic Plan; and,
  • An increased emphasis on research and development including $300,000 to establish the Research and Development Council and the development of a comprehensive Research and Development Strategy.
    •

    "While we have made significant investments through Budget 2007 as a result of our improved finances, we remain ever mindful that we do have a long road ahead to achieve our vision of self-reliance," said Minister Marshall. "Our good fortunes today are heavily dependent on the volatile revenues of our non-renewable natural resources. And once those resources are gone, so are the revenues gone, which is why we must strategically invest those resources today to ensure a prosperous tomorrow.

    "Slowly but surely our government has made progress in addressing our tremendous debt," said Minister Marshall. "Having said that, we must continue to provide governance that is based on sustainable spending. We must not lose sight of the fact that our government, and indeed the people of the province, bear an enormous debt load of nearly $23,000 for every man, woman and child living in our province today. We still have a net debt per capita that is more than double the national average, and we therefore must remain vigilant in our fiscal deliberations."

    Minister Marshall, however, assured the people of Newfoundland and Labrador the Williams Government will make decisions that reflect a responsible and caring government and a government that will continue to forge ahead to enact its vision, despite the efforts of others to put obstacles in its way.

    "Our government is optimistic and confident in the direction we have taken, and we remain steadfast in our approach to deliver to the people of Newfoundland and Labrador a province that opens the doors for personal and economic success," said Minister Marshall. "We truly believe that all Newfoundlanders and Labradorians share in our vision and support the actions we have taken. We continue to be buoyed by the level of confidence they have in our government."

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    Media contact:
    Bill Hickey
    Director of Communications
    Department of Finance
    709-729-6830, 691-6390
    billyhickey@gov.nl.ca

    2007 04 26                                              2:05 p.m.
     

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