Auditor general calls for significant changes to curb rising debt

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SACKVILLE, N.B. – It simply isn’t enough.

That was the message from New Brunswick’s auditor general Kim MacPherson last week, who said the government is not making enough progress on improving the province’s finances and needs to make significant changes to get the debt under control.

"Although recent government efforts to control spending are noteworthy, it is not enough," said MacPherson as she released the 2012-13 annual auditor general’s report last week.

MacPherson said she is concerned over the province’s rising debt levels, which grew by more than $930 million last year, pushing New Brunswick’s net debt to more than $11 billlion. She said the $3.3-billion increase in the net debt over the last five years (a 45 per cent increase) is a disturbing trend, one which has put New Brunswick with the second highest net debt per capita rate in the country.

MacPherson said this pace of debt growth is not sustainable in the long term, and only puts a higher demand on future revenue to pay past expenses. She called on the province to set long-term targets for net debt control and its reduction.

Tantramar MLA Mike Olscamp said he, too, is disappointed with the mounting debt but said the government is working towards reducing its deficit so that it can start to pay off its debt; but it will take time.

Olscamp said although the provincial government has made strides in reducing expenditures over the past couple of years, the lack of revenue coming in is creating a shortfall that is becoming difficult to overcome.

“We have brought our expenses down but the big problem is the lack of revenue,” he said. “We have to start getting some more income coming in so we can start paying that off.”

Olscamp said the government has been making some cutbacks and finding efficiencies within its departmental budgets and on items like pension reform, but it is also struggling with less money coming in as a result of various factors – including reduced personal and corporate income taxes, mill closures, a faltering economy, among others.

He said the government is hoping to increase its revenues through the development of natural resources, such as shale gas, as well as increased business development, in particular in research and innovation. The forestry sector is also starting to rebound, which should prove beneficial, he said.

Olscamp said he would rather the government find ways to “prime the pump to get some money coming in” than look at major cuts to social services.

Geographic location: New Brunswick

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