PEI Capital Budget will increase Provincial Debt $400 million or more
PEI Treasurer Wes Sheridan, spending the future today
Five year plan has aggressive spending of half a billion with only $60 million income
The Liberal government will be spending $440 million for capital upgrades over the next five years while it will also run an operating deficit.
How will it do that? It will borrow money at a time when interest rates are relatively low.
It’s a gamble. If the economy stays in recession interest rates will stay low. But they have never been this low before and never stayed low for long.
When interest rates go up, we will be sitting on $2.5 billion dollars of debt with a large part of our population low-income tax generating seniors.
However, Sheridan and Premier Ghiz are sanguine about it. “At the same time, we are stimulating the economy by providing much-needed jobs so
Islanders and our local businesses can prosper.”
We will look at the line items later but it just jumps out at you – they have no fiscal common sense.
For example, lots of headlines are dedicated to replacement of senior’s accommodations, the manors. The actual money spent on that construction will profit a few big companies not the average Islander.
Has the government read any of the numerous studies, including a recent one in New Brunswick, that found it is seven times cheaper to keep seniors in their own homes?
In-home care of seniors creates long term employment on PEI which is a long term economic stimulant.
It’s not flashy like $50 million of capital spending and sod turning photo ops. It just gets the job done for 1/7th of the money.
One Response to 'PEI Capital Budget will increase Provincial Debt $400 million or more'
This type of debt is crippling to any small economy because there isn’t any long term tax base created. The money is spent to the benefit of the Liberal friendly companies who recieve the contracts but contributes nothing to the tax base. In other words it does not generate any revenue for our economy, and when interests rates rise the cost of paying this money back will triple for future generations who will be left holding the bag.
The Island needs investment in agriculture, forestry, fisheries,and renewable energy which will continue to generate revenue to pay for necessary goods and services that Islanders require like healthcare and education.
Sit back and allow these unconscious politicians to run our Island economy into the ground;we get what we deserve if we do not join together to change this situation. It can be changed, but only if we do something to change the situation.
Wayne MacKinnon
27 Nov 09 at 8:55 pm