There will be no balanced budget next year and spending cuts and tax increases are likely, Premier Darrell Dexter conceded yesterday.
In a tough, hour-long press conference, the NDP admitted meeting three of its main election promises – no spending cuts, no tax hikes, no deficit next year – is unrealistic.
“The easy thing to try and say is we’ll allow economic growth to generate additional revenue and that will somehow fix the problem," Dexter said. "That is not going to happen."
Yesterday morning’s statements were in response to an Economic Advistory Panel report on the state of the province's finances released Friday, but the writing had been on the wall for some time. A Deloitte report this summer said the province is on pace to rack up $1.3 billion of debt by 2012-13.
Dexter defended his campaign promises yesterday, denying they were irresponsible.
“Remember that at the time of the election we had a government that was telling us we had a balanced budget," he said. "I think even on the coldest day in January, nobody would have believed that the actual deficit would be over $1 billion."
The premier confirmed next year’s budget will not be balanced, but said his main priority is to get the province quickly onto a sustainable path. He said not taking drastic action would “be heaping billions of dollars of debt onto the shoulders of future Nova Scotians.”
In January, the province will begin broad consultation with Nova Scotians in order to create a multi-year fiscal plan.
Yesterday was a big “I told you so” moment for the Liberals. Party leader Stephen McNeil insisted throughout the election campaign the NDP’s balanced budget promise was unrealistic.
“In order for this process to have any validity, this government needs to come clean with Nova Scotians, to tell them that they misled them during the campaign,” McNeil proclaimed.