The NDP is waiting for next year to rip off the multi-million dollar band-aid.
This year’s budget released Thursday shows the province will avoid spending cuts or tax increases, but it takes a $591-million deficit hit. When you add on capital spending, Nova Scotia’s debt will jump up $1.1 billion this year to $13.5 billion.
It’s a result, the NDP says, of plummeting or flat-lining revenue sources and rising expenses. The deficit looks worse because about $340 million will be paid at the end of the year to cover next year’s university budget.
It all adds up to a large blow to the province’s books, but Nova Scotians likely won’t see much effect in their day-to-day lives this year. It’s next year the NDP has promised to run a balanced budget.
Even taking away the hundreds of millions in university payments, the government will have to cut expenses by about $570 million to stay out of the red next year.
Finance Minister Graham Steele wouldn’t comment on what may happen in 2010, but said it was too late to begin reining in costs halfway through this fiscal year.
“You can damage the economy if you pull back too far too fast. What we’re trying to do is find the right balance,” he said.
“A lot of budgets were in place, salaries are being paid. It leads to instability and uncertainty if you come into office part way through a fiscal year and try to make drastic changes right off the top.”
The NDP only cut down about $13 million this year, mostly through deferring grants and programs. The only flat-out cut was to a $2-million rink revitalization program planned by the Tories.
Steele said this was essentially a Tory budget and the first true NDP budget will come next year. Thursday’s document did include $34 million of NDP promises, such as removing provincial tax from home heating electricity.
One notable increase is a jump of $70 million towards buying land which Steele called “a once-in-a-lifetime opportunity.” The province is mandated to protect 12 per cent of provincial land by 2015.