A senior investment advisor in St. John’s says one of the major flaws in the budget is that it contains no margin for error. This at a time when interest rates are at their lowest in decades and can only go up.
The province projects a return to surplus in five or six years but Larry Short from Short Financial calls that a wish, not a plan. He doubts the budget will sway any credit rating agency to improve our rating.
Short says already interest is the single largest expense we have and compares it to someone who has a large mortgage and is teetering on bankruptcy, then all of a sudden there’s a significant increase in the interest rate. The sooner we get that under control, the better states Short.
Meanwhile, Premier Andrew Furey says Short will regret in four years’ time saying that their projection of a return to surplus is a wish, not a plan.
He says about 80 per cent of public workers are outside core government and with the agencies, boards and commissions. That’s where they can save. He says details will emerge over the next several months.
He says they have to get a handle on the accountability framework of the ABCs as some of them may be better positioned elsewhere.
Meanwhile, Short says the “wealth” tax imposed by government on those earning over $136,000 a year will bring in only $15-million and do nothing for our bottom line on a $9-billion budget.
He calls it a symbolic gesture.
