Surpluses galore

I am coming off the fog of a fairly significant bout of the flu but I did have to rub my eyes a bit when I heard about the provincial government surplus. On the heals of the $14 billion federal government surplus, it seems the provincial government has a $236 million surplus.

Apparently running a surplus is ’embarrasing’ (according to Bruce Fitch). Times are changing, I guess. At one point, governments would have killed to have a surplus. Now they are embarrased by one.

I don’t know what to make of these surpluses. Newfoundland is running a large surplus because of oil revenues and out-migration is increasing. The Feds are running a large surplus. New Brunswick is running a surplus.

There’s an old saying about making hay while the sun shines. Yet our governments are spending less than ever on investments that will support economic development for our province into the 21st Century.

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0 Responses to Surpluses galore

  1. NB taxpayer says:

    I think running a surplus is fine. But as you said, and I think you’re right, having no solid plan to turn the economy around via fiscal policy, while running a massive surplus, is atrocious to say the least. Not to mention, it’s poor governing on the financial side.

    I mean, the reason that personal and corporate income taxes were raised in the first place was not as much to recoupe $50 million for the government coffers annually but because the finance department projected large growing deficits in the next three years.

    Now I know it would have been hard for anyone to forecast certain monetary and fiscal trends (i.e. dollar parity and zink prices globally) However, it is clear now that immediate steps need to be taken to address the fiscal challenges that are currently in front of us. By not taking
    action, New Brunswickers could feel the pinch down the road as this massive surplus means we now have “wiggle room” to act.

    Some statist may advocate to keep the taxation structure the way it is so to ensure the continued provision of essential
    public services that New Brunswickers deserve and expect.

    Also, economic developers who believe in regional development programs as a means to move the economy forward may want to see Graham step up his grants and loans to entice companies to move into the province (a practice that he pledged to cut down on). As much as I disagree with this approach, I can’t blame advocates of this practice to wonder why more cash wasn’t pumped into BNB. Or better yet, reform BNB altogether and give it more power and jurisdiction.

    Anyway, as a supply-side libertarian, I can only hope that this surplus will entice the government to rescind it’s march tax hikes and cut personal income taxes right across the board. Furthermore, it is essential that government create a healthy atmosphere for business by significantly cutting both the general and small business corporate tax rate. In this case moving it back to 12 percent and 1.5% per cent respectively. Not to mention, moving the income threshold eligible for small business back to $400,000 from $474,000.

    IMO, if we can create a friendly environment for taxpayers and business, we won’t have to drag people kicking and screaming into this province. Furthermore, we won’t have to dangle out non-repayable loans and payroll rebates in order to entice business to move into an area that they initially would never have moved into in the first place due to its small market, slow economy and high taxes. In other words, the longterm benefits foe the economy outweigh the shortterm with this model.

  2. David Campbell says:

    You know where I stand on this stuff. I said before I wished Bernard Lord had the guts to just shut down BNB. Letting it wither on the vine with no vision and being cut away made it in many ways irrelevant. I happen to believe that economic development is a public good and that citizens have the right to their political leaders making some effort to work on having an economy on which society depends. This does not mean – necessarily – grants to industry. But it does mean spending a portion of tax dollars on stuff that makes a community attractive for industry growth.

  3. Anonymous says:

    I suppose it is an embarrassment because a surplus after the bad news of the budget means that the government was scare mongering with their forecast of a $400 million deficit. Also it is a sure sign of them over taxing us.
    My problem with it is that they dont seem to know what to do with it. They are hedging on whether they pay off some of the provincial debt or to raise taxes further. I think it should be used for something constructive instead of just giving it away to Irving or running backwards and forwards to their constituencies with cheques for new windows in the legion or money for the Lions Club Christmas raffle. I would go further and say to Irving youve had enough money off us for the time being, youre not getting any more for at least ten years so dont bother asking.
    Then the government should concentrate on governing properly instead of the half arsed way they have been doing it up to now.

  4. Anonymous says:

    “supply-side libertarian”

    Guess that means you pray a great deal, as there is darn little evidence that supply-side economics works or that libertarianism makes any sense whatsoever. I’ll take practical experience over faith-based economic philosophies any day of the week.

    Surpluses are certainly more popular than deficits, so it is not surprising that governments these days produce them. Surpluses are the flavor of the month with editorial writers and opinion-makers. Sure they will say it means we are over-taxed, but they still prefer them to deficits (when deficits occur, they are interpreted to mean that we are overspending, not that we are under-taxed).

    David’s is right that a plan is needed that will bring large employers into NB. I think that means spending big bucks and it is possible that the NB government is preparing to spend the surplus on this. I just hope that’s the case and that whatever they come up with makes sense.