Auditor General says Provincial deficit levels not sustainable

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Auditor General says Provincial deficit levels not sustainable

by ahnationtalk on January 29, 2016426 Views

January 29, 2016

In his Report on the audit of the financial statements of the Province of Newfoundland and Labrador, delivered to the Speaker of the House of Assembly today in St. John’s, Auditor General Terry Paddon raises serious concerns regarding the Province’s ability to sustain the level of unprecedented deficits forecast in the December 2015 Economic and Fiscal Update.

“The Province recorded a deficit of $986 million in 2014-15, the highest in our history,” said Mr. Paddon. “Additional deficits, totalling $12.2 billion, are forecast from 2015-16 to 2020-21, an amount greater than the Province’s entire Net Debt at March 31, 2015. Deficits of this magnitude are not sustainable.”

When compared to the size of the Provincial economy, the forecast deficit for 2015-16 of almost $2.0 billion will be over 3 ½ times greater than the next highest province. This level must be reduced.

“Dealing with the anticipated deficits will require hard choices that will affect all residents of Newfoundland and Labrador,” said Mr. Paddon.

Measures to address the size of the deficit will have to consider opportunities to increase revenue from existing or new sources and reductions in spending, Mr. Paddon noted. These measures will have to be implemented within a reasonable timeframe.

“Seventy per cent of program expenses are directed towards health, education and skills development and over 50 per cent of Government’s program costs are spent on salaries and benefits,” said Mr. Paddon. “Any meaningful reductions in expenses will have to consider the entire breadth of public services and consider how and where those services are delivered.”

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The Auditor General’s Report is available on the Office of the Auditor General website at http://www.ag.gov.nl.ca/ag/reports.htm

Media contact:
Terry Paddon
Auditor General
709-729-2700

2016 01 29

NT3

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