Polak acknowledges public doubts about finances
Mary Polak is minister of children and family development, and MLA for Langley.
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Updated: September 01, 2009 5:07 PM
Frank Bucholtz
Times Reporter
Mary Polak, Langley MLA and minister of children and family development acknowledges that the BC Liberal government needs to rebuild confidence in its financial management skills.
She was commenting on the provincial budget tabled on Tuesday, which calls for a deficit of $2.8 billion in 2009-10, up dramatically from the $495 million projection made in the spring.
Polak said many of the factors that led to the much larger deficit were not known when the earlier forecast was given in the spring legislative session, and during the election campaign. She noted that the biggest hit to provincial finances came in June when the province learned of an $824 million revenue drop, due largely to falling natural gas prices.
She said that at that time, the government found it could not meet the earlier target.
There has been widespread public dissatisfaction with the government's fiscal management, particularly since the surprise announcement in late July that a new HST of 12 per cent was being introduced, replacing the seven per cent provincial sales tax and combining it with the federal five per cent GST.
"We have a job ahead of us," Polak said, about convincing the public.
However, she pointed out that the government is making changes in regards to the HST's impact. The budget includes an announcement that there will be no effective HST on electricity. natural gas and fuel oil used for hearting.
She said the tourism industry has asked for more marketing funding to reduce the HST impact, something Victoria has agreed to. There will be ongoing consultations with other industries that expect to be hard-hit, including the restaurant and new home construction sectors.
She addresses other HST issues in a letter to the editor which can be found under the letters tab on this website.
Medical Service Plan premiums will rise six per cent each year over the next three years. The jump in premiums will not affect people with low incomes, she said.
A family of four with an income of $60,000 will pay about $72 extra in premiums.
The province also plans to raise the basic provincial income tax credit to $11,000 on Jan. 1, reducing taxes slightly for most people.
Polak said growth projections in the budget come from a panel of independent forecasters. The figures state that the provincial economy will contract by 2.9 per cent this year, but grow by 1.9 per cent in 2010 and 2.7 per cent in 2011. Polak said the government has reduced those growth estimates in its budget, and is also setting funds aside for contingencies over the next three years.
Polak said she expects the Fraser Health Authority to tighten up in the area of administrative expenses over the next year,. She said the ministry of health is already doing so, as are other ministries including her own, and it is prudent that health spending go to front-line services and not administration.
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