Province Meets Budget Savings Target

FINANCE -Province Meets Budget Savings Target

The government has succeeded in reducing overall spending by $32 million -- about two-thirds of one per cent of total program spending for the year. Finance Minister Peter Christie said today, Nov. 21, that the savings came from operations right across the provincial government, with two notable exceptions.

"The priorities of Nova Scotians -- patients in the care of our hospitals and children learning in our schools -- were protected."

The minister said Nova Scotia is not alone in the budget battle this year. Slower than anticipated growth in the national economy

• blamed on a multitude of factors from SARS to one case of mad cow disease in Alberta -- combined with ever-rising costs for health care have taken a toll on the finances of many provinces.

"Most provinces are struggling this budget year. Health costs are climbing faster than we can pay. Revenues are down all over. Nova Scotia, in the earliest stages of financial recovery, is particularly vulnerable."

The minister said keeping Nova Scotia's finances in the black remains a tall order.

"We're on the right track. Financial stability breeds economic growth, and that means a better life for Nova Scotians and more secure public services. We're on the right track, but we still have a way to go."

In 2002-03, Nova Scotia recorded a balanced budget, based on accrual accounting that is universally accepted in the financial community. Nova Scotia's auditor general maintains that the province is a national leader in public financial accountability, given its compliance with Generally Accepted Accounting Principles. The 2002-03 surplus was the province's first in 40 years.

Mr. Christie said operational savings across government account for about half of the $32 million savings targeted in his mid- year Budget Management Plan. The other half comes largely from deferral of planned spending.

While the government managed to confine most of the savings to internal operations, the minister cautioned that the delivery of some government services could still be affected. Job vacancies in government will go unfilled and virtually every administrative budget has been squeezed.

"Departments are already operating on slimmed-down budgets, so it's not easy to find savings. We appreciate the effort they are making to ensure Nova Scotia maintains its improved financial status, and improved credit rating position."

In mid-September, Mr. Christie forecast a fiscal year-end surplus of half a million dollars, down from the $2.8 million surplus projected in the spring budget. The next update on the province's financial picture will come in December, and contain updated revenue data that will help determine whether a balanced budget for 2003-04 is still within reach.

All departments contributed to the Budget Management Plan.

The Department of Community Services identified $5.8 million in savings, which is 0.87 per cent of the department's $666.4 million 2003-2004 budget. Savings of $5.5 million from the Department of Education amounts to a 0.46 reduction in that department's annual budget.

As part of its total $4.4 million (1.79 per cent) savings, the Department of Transportation and Public Works is deferring some maintenance work until spring.

The Department of Health, with far and away the largest budget in government at $2.2 billion, is contributing 0.18 per cent or $3.7 million in savings.

Smaller government operations, while not saving those large dollar amounts, are contributing at a higher proportionate level

• in many cases parring two per cent or more from annual budgets. Total savings from various Public Service operations amount to $3.7 million. Included in that is $1.4 million from Nova Scotia Business Inc, which is reducing its payroll rebate budget.

The budget reductions are effective immediately.