The House met at 9:00 a.m.

MR. SPEAKER (Lush): Order, please!

MR. SPEAKER: The hon. the Minister of Environment and Lands.

MS. COWAN: Thank you, Mr. Speaker.

December 6 has been recognized as the National Day of Remembrance and Action on Violence Against Women in commemoration of the fourteen women who were killed at École Polytechnique in Montreal on December 6, 1989. While the Montreal Massacre is an extreme example of violence against women that exists in our society, it serves as a stark reminder of the women and children who are beaten, sexually assaulted, or who live with the threat of such violence every day.

Earlier this week I asked my male colleagues in this House to wear a white ribbon as a symbol of their opposition to male violence against women. I am wearing a purple ribbon to show my support for the White Ribbon Campaign which was started on December 6 last year, by a group of men who wanted to make it clear that male violence against women is unacceptable. This is an issue that is not just of concern to women. We must all be part of the solution.

Last year in this House my colleague, the hon. Winston Baker, who was at that time acting Minister responsible for the Status of Women, announced that an executive level committee with representation from Social Services, Justice, Health, Education and the Women's Policy Office had been established to develop a provincial strategy on violence. Three sub-committees on violence against women, children and elderly and dependent adults were also established to work with the executive level committee to develop a long-term plan on the delivery of services to victims of violence and for prevention. Work continues on this co-ordinated approach.

I am pleased to announce today that our request to the Federal Government for funds to assist in this process has recently been approved. Funding received from the Federal Government will allow us to consult with communities across the Province on proposed strategies and to assist them with planning for community actions at the local level. After this consultation process is complete, government will finalize our long-term plan. It is important to remember that while government can and should play an active role in eliminating violence against women and children, we cannot reach this goal alone. This can only be done through partnerships with community groups and caring individuals who join us in taking action.

Violence against women cannot be divorced from the societal context in which it exists. As long as women are beaten in their own homes, afraid to walk in the streets at night, trivialized and objectified in the media, we are not safe. As caring men and women, we must strive together to remain vigilant of all those minor instances and seemingly trivial occurrences which give the message that women somehow pursuing their own career aspirations are not quite serious, that assaulting a woman in her home is somehow not quite a crime, and that making a sexist joke in the workplace can do no harm. As long as we live in a society which permits these symptoms to prevail, we have provided fodder for those disturbed people, like Marc Lepine, who use these messages to justify their own distorted actions.

We are not responsible for the act of Marc Lepine, but we are responsible for our everyday acts which hinder true equality. Nw is the time for all people who care, to strive toward a better world, a truly equal world, a world where men and women can stand side by side without fear and in the true spirit of co-operation.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Mr. Speaker, I have just a few brief remarks.

We concur with the comments of the minister, and I think what is extremely important for us as legislators is that the vast majority of us are men, and it is pretty clear that we are the people, perhaps, who should be trying to get this message out amongst the public.

I think it is only appropriate that such a day of recognition, or a week of recognition, be held, and it is appropriate that it be held at this particular time, in view of what did occur in Montreal.

So we support the comments of the minister. We are pleased that the Federal Government provided some funding to allow this further review and investigation to be done around the Province, and we look forward to the results of that when it might be presented to the House.

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

I rise in support of the recognition and remembrance of December 6 as a day to mark the remembrance of what happened in Montreal and the extreme violence against women by Marc Lepine.

I wear a white ribbon today, also in memory of the fact that in 1982, when Margaret Mitchell, Member of Parliament, rose in the House of Commons and spoke for the first time in the Federal House about wife abuse, she was laughed at - and laughed at by men.

No longer do men laugh at the subject of wife abuse in Legislatures and, in fact, men are now - and I am pleased to see this White Ribbon Campaign because it marks the fact that men are now taking some responsibility to do what they can to solve the problem by encouraging other men to be aware of the attitudes that lead to violence against women.

I welcome the consultation process that is going to be started, but I understand that the consultation process about violence against women has already resulted in a demand and a requirement, Mr. Speaker, for more Transition House support in this Province and for more programs, including - I would suggest to the Minister of Education that in these times of financial restraints there are things that we can do in terms of programs that do not cost money. In the most recent report of the Newfoundland Status of Women Council there are some recommendations about programs in the education field which can, at a very early stage, help students to talk about this issue of violence between the genders, and I think, Mr. Speaker, that is something I would like to see instituted very quickly and speedily. Those are my comments, Mr. Speaker, on this day. It is a sad day to remember what has happened in Montreal but it is also a day on which we can increase our resolve to try to do something about the problem. Thank you.

MR. SPEAKER: The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Thank you, Mr. Speaker, I am presenting today Government's plan to address the deterioration in the Province's financial position as described in the House of Assembly on November 12. In the eight months since the 1992 Budget, both the provincial and national economic performance have been worse than expected. As a result, revenues are lower and expenditures to date are slightly higher than forecast. If corrective action is not taken, the current account deficit will increase from $29 million, as projected in the 1992 Budget, to almost $154 million. This economic slowdown also is causing a significant deterioration in our projections for 1993-94.

Our ability to absorb this financial deterioration is constrained by our high debt levels and low credit rating. The capacity of the provincial and national economies to generate revenue growth now is markedly different than it was during the 1980s. The Province's financial integrity cannot be jeopardized by ignoring these realities.

Government must address this situation or in the long run essential services will be threatened. This will require the support of the general public and the co-operation and understanding of public sector employees. By being prudent and responsible in our use of public services, every person in this Province can play an important role in reducing the cost of Government.

Economy: Mr. Speaker, government had projected that the provincial economy would contract by 0.5 per cent in real terms in 1992. All governments in Canada, however, over-estimated economic performance this year. The continuing slow growth of the national and international economies, as well as the major reduction in the fishery and weak consumer and investor confidence, have caused us to revise our real Gross Domestic Product projection to a decline of 2.8 per cent.

Although Government will not be presenting detailed economic projections for next year until the 1993 Budget, our prospects for modest growth are good. Recovery in the North American economy appears to be underway, improving the demand for our export products. Although there was an initial slowdown in the Hibernia project, activity has increased significantly in the summer and fall. The expected economic gains next year, however, will only partially recoup the losses of the last three years, and nominal rates of growth will be low. This growth will not alleviate the pressure on Government's finances.

Fiscal Position: Mr. Speaker, as I indicated in my November 12 Statement to the House, the deterioration of $124.8 million in the current account deficit from Budget is primarily attributable to a projected shortfall in current account revenues. The increase in our projected total budgetary requirement would be less, however, because of savings of $23.9 million in our net capital expenditures.

The projected revenue shortfall is primarily a result of the deterioration in transfer payments and Newfoundland income tax, revenue sources, Mr. Speaker, estimated and administered by the federal government. Equalization payments will fall short of Budget by $49 million, principally because of a general deterioration in tax revenues in all provinces and as a result of new lower population estimates based upon the 1991 census. We also will receive $47.6 million less in personal income tax, because of a significantly reduced estimate by the federal government of income tax collections across Canada, upon which the estimates of provincial income taxes are based. Established Program Financing payments will be above Budget by $16.2 million, while retail sales tax will be below Budget by $17.9 million.

While our revenue base has been significantly eroded by federal fiscal restraint measures implemented in recent years, our shortfalls from Budget this year are not the result of further efforts by the Government of Canada to restrain payments to provinces. These shortfalls from Budget projections are being experienced by all governments in Canada, and are due to the national and international economic slowdown being longer and deeper than anticipated by virtually all private and public sector forecasters.

The increase in current account expenditures from Budget is due in large part to the difficult economic conditions, and the resultant pressures on our employment programs and social assistance payments. As well, there has been a small increase in expenditures in the health care sector.

Mr. Speaker, examining the variances from this year's Budget, however, will not give a complete picture of the challenges that this and other governments now must face in financing of public services. During the latter half of the 1980s, strong economic growth throughout the country, fuelled in part by a build-up of government, business and personal debt, led to steady real increases in taxation revenues, and as a result, equalization payments, as well. When combined with the impact of steady inflation on nominal incomes and spending, governments experienced several successive years of very strong revenue growth.

This revenue boom, Mr. Speaker, did not last. Nominal rates of growth in GDP have dropped from an annual average of 8 percent nationally during the 1984 to 1988 period to just 3.2 per cent during the 1989 to 1992 period. Tax revenue growth in all provinces combined has declined from 9 to 4 per cent for the same periods. Equalization payments received by this Province, which grew at an annual average rate of 10.5 per cent over the 1985-86 to the 1989-90 period, have declined since then and are now $62.8 million less than they were three years ago. During the late 1980s, on average, federal transfers accounted for nearly 50 per cent of our current account revenues. In this fiscal year, federal transfers will contribute only 43 per cent.

The level of programs and services which government currently supports were built up during those years of high revenue growth, and are not consistent with our current financial means. In recent Budgets, this Administration has enacted many measures to control the escalating costs of public services. It is clear that expenditure levels are not as responsive to changing economic conditions as are revenues. They are based on program and service levels that were established in the economic growth period of the past decade. They are strongly influenced by wages and benefits which also were established in this period of growing revenues. Unfortunately, today's economy simply cannot support all of the expectations that are placed upon the public purse. To continue to provide for the current structure which sharply increase our deficit on current account, necessitating unacceptable levels of borrowing. We cannot endlessly borrow to finance current account.

Our ability to borrow the funds required to finance deficits is constrained by our already high levels of debt and, of course, the need to preserve our credit rating.

The Province's total public sector debt, including Hydro and NMFC, as of the end of the last fiscal year amounted to $10,244 for every man, woman and child in the Province. This equates to nearly $41,000 for a family of four. Interest payments on that debt amount to $4,084 every year for that same family. When the federal government's debt is added, the public sector debt level for that same family of four exceeds $100,000 and the annual interest payments that must be made on that are almost $10,000.

Mr. Speaker, while the magnitude of the national and provincial debt is staggering it is very important at this point to clarify what, in fact, it means to the citizens of this Province and to future generations. This Province relies on the financial markets to fund our capital requirements and any shortfalls which occur on current account. The investors or lenders in these markets are keenly aware of how we manage our financial affairs. In making a decision to invest in the Province, they rely heavily on the credit rating agencies for their assessment of the Province's credit worthiness.

The recession in North America has meant that the credit rating agencies are focusing on the financial strategies and demonstrated track record of borrowers. This Province is not alone in having to face the reality that there is a limit to the level of debt that an economy can sustain. Already this year, four provinces have been downgraded by one or more credit rating agencies, as have the foreign debt obligations, of course, of the federal government.

The credit rating agencies, collectively, have rated Newfoundland at the lowest level of all the provinces. In fact, only one agency has rated us in the crucial A category. The other three rate the Province in the triple B category.

I cannot emphasize enough the importance of maintaining our credit ratings. I must reject emphatically the suggestions from many people, some of whom are in this hon. House today, that we should address the deterioration in our budgetary position by borrowing more, by placing an additional burden on the citizens of the Province. To these people I say no!

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: If we simply attempted to borrow more and took no further action to reduce the deficit, we surely would place our credit ratings in jeopardy. Many institutional investors, in fact, some financial markets, are precluded from investing in securities which are rated below the A category. If our credit ratings were reduced, our ability to borrow for capital purposes, our hospitals, our schools, our highways, would be significantly curtailed. We would be faced with a restricted investor base, and a higher cost of borrowing.

This Government is not prepared to borrow more than we can prudently manage. We will do whatever is necessary to maintain the financial integrity of our Province in the international markets.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: This, Mr. Speaker, is essential in order to protect our ability to provide health, education and other public services in the future. We will not deliberately jeopardize our credit rating.

Fiscal Strategy: Mr. Speaker, achieving the current account deficit target established in the 1992 Budget clearly will not be possible given the short time remaining in this fiscal year. It is our intention, however, to introduce measures today which will mitigate the deterioration in the current fiscal year, and at the same time improve the projected situation for the 1993-94 fiscal year.

Mr. Speaker, I believe it would be worthwhile to review the process by which Government has dealt with the current dilemma. Our approach from the beginning was focused on three fronts: first, to prudently reduce expenditures wherever possible in the public sector; second, to raise additional revenue through a series of taxation and other measures that would not unduly impinge on economic activity; and third, to allow a prudent increase in the current account deficit which would be financed through increased borrowing.

If, Mr. Speaker, in the final analysis, the combination of expenditure cuts and increased revenues were not sufficient to reduce the deficit to a manageable level, then we would have no choice but to consider means to reduce the total cost of public sector compensation.

Our approach to the problem was clearly communicated to all of the public sector unions. Our initial meeting with the unions was held within days of becoming aware of the fiscal position and the fiscal problem. At this meeting, we asked for further input. The Newfoundland and Labrador Nurses' Union and the Newfoundland Teachers' Association immediately indicated a willingness to hold further discussions, and asked for further meetings. Eventually, all public service unions, with the exceptions of the Newfoundland Association of Public Employees, and the Canadian Union of Public Employees, indicated a willingness to discuss our problems, and discussions were held.

I thank these union executives for showing the leadership that is so necessary in these difficult times.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: I thank them for their help. Never once, in the period leading up to this Statement, did I receive a request for a meeting from the NAPE or CUPE leadership. I hope this attitude changes, because there was much to be gained and opportunities were missed. In fact, as a result of some of the early discussions with the Nurses' Union we are now reviewing means by which chronic injury cases may be more appropriately dealt with.

There has been a series of meetings with the unions during which I have been quite candid about the magnitude of our fiscal problem and have solicited their co-operation in seeking solutions. At the outset we did not see much likelihood of being able to adequately address the situation without reductions in compensation being achieved in some manner, and we advised the public sector unions of this likely outcome. In so doing we recognized that considerable speculation and uncertainly would result. This was, and is, unfortunate, but to have failed to consult, in our judgement, would have been the worst possible course of action.

Mr. Speaker, over the past couple weeks, through the extraordinary efforts of public sector managers and workers, who live day to day with the continued effects of long-term restraint measures, we have succeeded in generating expenditure cuts and cashflow savings well in excess of what we originally considered possible. This is particularly true given the timeframe available within which to achieve such reductions. This effort, combined with a series of revenue measures and a modest increase in borrowings, has resulted in an acceptable package that will avoid the need for specific measures aimed at reducing public sector compensation. In short, Mr. Speaker, there will be no rollbacks this year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, the effect of the measures we are implementing will be to reduce the projected current account deficit for the 1992-93 fiscal year of $153.8 million by $75.2 million to a more acceptable level of $78.6 million. When the impact of the reductions in capital expenditures are considered, the total budgetary requirement is only $25.7 million above Budget. We believe this to be a manageable result.

These measures also will reduce significantly the projected deficit for the 1993-94 fiscal year. In addition, during the year several high interest bond issues were called for early redemption and the interest savings thereon will impact positively on 1993-94 fiscal year and thereafter.

Mr. Speaker, while Government has taken a conscious decision against unilateral measures to reduce public service compensation as part of our corrective action for 1992-93, it must be stated that our budgetary targets for 1993-94 cannot be achieved without reductions in the total compensation package of Government. I have communicated that message to the representatives of public sector employees at every opportunity over the past few weeks. I also have indicated that Government would like to embark on a consultative process with the public sector unions to try to identify mutually acceptable means by which this can be accomplished. I have asked public sector unions to respond to this overture and in most cases the response thus far has been positive. Government realizes that this process will be difficult for our employees, particularly given that we already have had two years of wage freezes. As a sign of our good faith in this regard, and as a result of the positive response of most public sector union leaders, I will be introducing legislation in the next few days that will remove the restrictions on public service collective bargaining in the third year covered by Bill 17.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: I hope, Mr. Speaker, this move will facilitate a return to collective bargaining with the public sector unions in the next few weeks.

Mr. Speaker, as part of the process of addressing the 1992-93 deficit, government has also considered it necessary to take certain decisions with respect to our Budget strategy for 1993-94. It is important that the actions that we are taking now, be seen as a part of our commitment to achieve a balanced Budget on current account at the earliest possible opportunity. To that end, government fully intends to achieve a current account deficit significantly below that projected for 1992-93 and we intend to keep our total budgetary requirements in the $200 to $230 million range for 1993-94. In addition to the efforts to reduce the total compensation package referred to earlier, during the upcoming budgetary process we will be conducting a thorough review of all programs with a view to assessing their affordablity.

Fiscal Measures: Mr. Speaker, as I indicated earlier, the actions we are taking today will reduce the projected current deficit for 1992-93 by $75.2 million. In mid-November, government departments and agencies were directed to achieve a 1 per cent reduction in their total salary budgets for this fiscal year and immediately implement a hiring freeze with the exception of workers in certain critical services. Departments and agencies also, were directed to achieve a 3 per cent reduction in their operating budgets. These particular measures will reduce net current account expenditures by $19.9 million. Further, a freeze on consulting services and certain information technology expenditures, should provide further savings of $1.9 million.

While in mid-November wage and benefits reductions seemed inevitable, extraordinary efforts by all departments over the last two weeks achieved additional operating savings of $28.5 million in the remaining three or four months of this year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: The application of restraint measures to Provincial Crown corporations and the redirection of certain cashflows will contribute a further $14.3 million to the reduction of this year's deficit.

The personal income tax rate will increase to 69 per cent of the basic federal tax on January 1, 1993. Incremental revenues of $2.7 million are forecast from this measure in 1992-93. The net effect of this measure and the increase announced in the 1992 Budget will be to increase weekly deductions starting in January for a single taxpayer earning $25,000 by $1.15.

The tax rates for gasoline and diesel fuel will be increased by two cents a litre, effective today. This increase, this measure will contribute $2.5 million to deficit reduction this year.

Also, effective today, the tobacco tax rate will increase by 2.5 cents a cigarette, with a concurrent increase for fine cut tobacco of 1.66 cents a gram. The new tobacco tax rates will generate $3.6 million this year.

A final fiscal measure involves increasing vehicle and driver registration fees to raise an additional $1 million this fiscal year.

Other Measures: As a result of fiscal restraint on wages and operating costs, Newfoundland and Labrador Hydro have advised that they will not be seeking a rate increase for industrial or residential customers in 1993.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: They are also hopeful that they will avoid an increase in 1994. We call on Newfoundland Telephone and Newfoundland Power to exercise the same discipline on expenditures so that they too can avoid rate increases.

Government remains firmly committed to the Strategic Economic Plan. This plan has a vision for this Province that will lead us into the twenty-first century as an active competitor in the global marketplace. Part of this vision also looks toward streamlined and more efficient Government processes that are responsive to the needs and desires of the public. The implementation of a Service Quality Program within the public service will be a large part of this approach. As well, we are looking forward to working with the federal government, in the manner discussed recently between the Prime Minister and the Premier with a view to achieving the objectives in the Strategic Economic Plan and the Federal Prosperity Initiative.

Government has been addressing the feasibility of privatizing certain Crown corporations or portions of their business. Some of the functions performed by those corporations are not serving at this point in time a public policy objective. These functions will better contribute to economic growth, if performed by the private sector. As well, Mr. Speaker, scarce public capital can be retrieved and used by Government to achieve its other public policy objectives.

Mr. Speaker, as a further demonstration of our resolve to reducing the cost of governing the Province in the future we will be asking the House of Assembly to direct the Redistribution Commission due to be appointed this coming March, to make recommendations for a House of Assembly consisting of the most appropriate number of districts between 40 and 46.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: In addition, we will be introducing legislation that will restrict the size of Cabinet to not more than one third the size of the House of Assembly.

Government made a commitment in the Strategic Economic Plan to adjust taxes where it could be demonstrated that these would have a positive impact on investment and economic growth without compromising the overall fairness and efficiency of the tax system. I am pleased to announce specific measures that Government will be implementing to act on this commitment.

One of the business incentive measures contained in the Strategic Economic Plan calls for the reduction of corporate income tax rates for all businesses in the Province. The reductions contained in the Plan are: from 17 per cent to 16 per cent for the general corporate tax rate; from 17 per cent to 7.5 per cent for manufacturing and processing income; and from 10 per cent to 5 per cent for the small business tax rate.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Government recognizes the advantages that can accrue to the business community and the provincial economy from the early implementation of these reductions. Therefore, I am announcing today that these reductions in corporate income tax rates will become effective January 1, 1993.

In addition, Government will further stimulate the small business sector and encourage job creation. My federal counterpart announced on December 2 that the federal government would support these objectives by providing small businesses with relief from unemployment insurance payments for new businesses starting up in 1993 and for existing businesses increasing employment during that same time. I am now announcing, Mr. Speaker, that this Province will build on the federal initiative by implementing reductions in the payroll tax for those businesses qualifying for federal UI relief.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, new, small businesses commencing operations in 1993 will pay no payroll tax for that year.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Mr. Speaker, for those small businesses increasing employment in 1993, they will do so with no increase in their payroll tax payments.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Conclusion: Mr. Speaker, in this statement Government has instituted measures to deal with the immediate effects on this Province of our national financial problem and to lay the groundwork for a longer term solution. We have been able to accomplish this largely because of the help and co-operation and hard work of individuals in all sectors of the public service, and we have called upon all people of the Province to contribute their fair share. We, Mr. Speaker, have preserved the quality of the services we provide to this Province.

The remaining longer term effects will be dealt with in the 1993-94 Budget. I believe this will be accomplished with what I perceive to be a new understanding and willingness to co-operate by the public sector union leadership. I believe this will be accomplished with the help of a more vibrant private sector, which will respond to the new challenges of our times. I believe this will be accomplished by the people of this Province who respond to adversity with determination and a willingness to do their share. Many of the letters I have received during the last two weeks support that belief. The future now looks bright. This recession will end.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: There are signs, Mr. Speaker, that the economic stagnation that has gripped the economy of North America is being pushed aside. Increased economic activity appears to be just around the corner. Oil will flow -

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: - and yes, the fish stocks will rebuild. And we still live in the best Province of the best country on earth.

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: Together, Mr. Speaker, we have many challenges: The challenge to come out of this recession stronger and more united than ever; the challenge to preserve the best medical care system in the world; the challenge to develop changes in our educational system that will enable more of our children to compete with anyone, anywhere -

SOME HON. MEMBERS: Hear, hear!

MR. BAKER: - and the challenge, Mr. Speaker, to develop a stronger, broader economy, so that in the future we can shed our financial dependence on the rest of the country.

By working together, by sharing our ideas, and by showing determination in our direction, we will accept these challenges, and we will win.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Mount Pearl.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Mount Pearl.

MR. WINDSOR: Thank you very much, Mr. Speaker.

Mr. Speaker, what we have just heard is an outright admission of failure on the part of this government. As we go down through the various measures the minister has announced this morning, we will see that everything he has done is undoing what has been done over the past four years since this government took office. What he will be admitting is a complete failure to properly manage the economy of this Province, a complete failure to now be able to address it without taking drastic action on the people of this Province, particularly on the taxpayers of this Province, and he is not fooling anybody. He is certainly not fooling the people in the galleries who are here representing the public sector unions, Mr. Speaker, by saying there are no wage rollbacks. There are no immediate wage rollbacks. You are now telling these people: you will roll back voluntarily next year, or else there will be fewer jobs in the public sector. That is what this government is saying.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: No wage rollbacks - yet, three weeks ago or a month ago when the minister announced that he would be coming in with this economic statement, he announced there would be a 1 per cent reduction in salaries, in overall total salary budget for this year. That will continue for next year, Mr. Speaker. He announced there would be a hiring freeze for this year - that will continue for next year. He announced there would be a 3 per cent reduction in overall budgetary allocations - that will continue for next year.

In addition to that, it will increase for next year. The minister has told the union leaders that there will be a further 5 per cent reduction in the payroll allocation for next year, or in the overall compensation package. Now, Mr. Speaker, how do you reduce the overall compensation package - if he's going to come forward on one hand and pretend to re-open collective bargaining, free and open collective bargaining, what is there to bargain for? If there is going to 6 per cent less in the overall compensation package?

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: I will tell you what there is to bargain for, Mr. Speaker - 6 per cent fewer jobs in the public sector next year! That is how the government is trying to balance their Budget - 6 per cent fewer jobs in the public sector, or more - or more, Mr. Speaker. Because the minister says there will also be a similar reduction in the overall expenditure.

You may not find it possible to do that. That may mean more jobs. Who knows? Maybe you can save some of the jobs by reducing the public service expenditure more. I doubt that very much. And there is no indication that one is transferrable to the other. So to say that there is no wage rollback, that is true for this fiscal year. For the balance of this fiscal year. But he has put a gun to the head of the public sector unions. He said: You will negotiate away some benefits or you will negotiate away jobs, one or the other, take your choice. That is what this government has said.

Is that this government's concept of free, collective bargaining? The Ayatollah Khomeini had a system similar to that. It is no wonder the Premier gave the flick to the previous minister. No wonder he gave him the flick when he found out what was happening to the public sector debt. It is amazing how we can go from a $29 million projected deficit to a $150 million projected deficit in six or seven months, and not even know about it.

I suspect the Leader of the Opposition was right. This government knew last March there would be a $100 million deficit and they deliberately cooked the books. Well, they have now found out that it comes home to roost. They flicked out the minister who was responsible at the time and put in the poor President of Treasury Board to take the burden and to bring down this news today.

So how are they going to deal with their problem? How did they deal with the $150 million deficit? They put the fear of God into all of the public servants and said: You will either find cuts in your departmental estimates or you will lose positions or programs. The minister, himself, says he can't believe how much the departments found. How much blood is flowing in the department floors, Mr. Speaker, in order to try to reach this kind of a reduction? They found a significant reduction, $28.5 million, in the departmental budgets. The Crown corporations came forward with $14 million. I suspect there are some Crown corporations that can come forward with more. We will find out in due course how much are in the other Crown corporations.

This government's solution is to increase taxes again. Personal income tax is now going far in excess of any personal income tax rate in any province of Canada. The Minister of Finance in Ottawa announced two days ago that the planned reduction of 1.5 cents in the surtax would go ahead as scheduled this year, in spite of the economic difficulties being faced by the Government of Canada, which are far worse than those being faced by the Government of Newfoundland and Labrador. They have a far more serious deficit problem. There is a far greater percentage of the federal dollar being spent on debt servicing than is the provincial dollar. That is not to say that ours is not a serious problem, but the federal problem is far more serious.

What did the federal minister do? Did he tax Canadians more? No! He said, `We will continue with our plan to reduce personal income tax by 1.5 per cent.' I stood in my place yesterday and asked the minister would he cancel the proposed increase of 1.5 per cent scheduled already for January 1, announced in last year's Budget. This government announced a 4 per cent increase last year, 2.5 per cent in 1992 and 1.5 per cent in 1993. He tried to kid the world, Mr. Speaker, by saying, 2.5 per cent in calendar year 1992. The impact has been, Newfoundlanders and Labradorians have been paying an additional 5 per cent, because it only took place in the middle of the year. So in order to get 2.5 per cent in 1992, government has been deducting 5 per cent. So we have been paying at the rate of 67 per cent for the past three months and for the balance of this year.

Now the minister is saying, Mr. Speaker, not only are we going to add the 1.5 per cent, but we are going to add 3 per cent more. We are going to 69 per cent. What was the rate, Mr. Speaker, in 1989 when this government took power? It was 60 per cent. It has increased 9 percentage points which relates to a 15 per cent increase in four years. Now, in real terms, that is a lot more than that because incomes, of course, have increased. So it is 115 per cent of a much higher income. Let's assume incomes have increased by 20 per cent only. We have been in difficult time and incomes have been held back. Let's say there was a 20 per cent increase, so we have 115 per cent of 120 per cent, which is somewhere around 125 per cent or 130 per cent.

That is the solution of this government, Mr. Speaker. And they will stand in their places, then, and talk about restraint and reducing the number of members in the House of Assembly. It sounds to me, Mr. Speaker, as if we need more members in the House of Assembly, to try to keep this government straight. Have no fear, there will be twelve less members but they will be on that side of the House after the next election.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: Mr. Speaker, that is all smoke and mirrors, the few dollars that would be saved by reducing the service to the people of this Province. Let's let the people decide. I don't have a problem with having your redistribution commission. You have that anyway, by law. But let there be a referendum to let the people decide if they are served by too many members, if they have enough or if they want fewer members. Let the people decide, those out there who are having trouble getting in touch with MHAs, particularly those on that side. It is no wonder members over there think they don't have a workload. They don't even appear in their districts. They don't even get out there. So let the people decide, Mr. Speaker, I say to the Premier.

AN HON. MEMBER: Oh, look who is talking, the old gerrymandering soldier himself.

MR. WINDSOR: There he goes.

MR. TOBIN: We are not all getting $10,000 a month.

MR. WINDSOR: It is not hard to know, Mr. Speaker, when we are getting close to the truth. The Premier's face turns red and he leaves the Chamber.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: You can read him like a thermometer, Mr. Speaker.

Now, Mr. Speaker, this government has done a great deal. I congratulate the minister in taking my advice in immediately instituting the reductions in corporate taxes that he announced in the Strategic Plan. What a wonderful thing he has done, he has taken it from 17 per cent back to the 16 per cent that it was when they took office, again admitting the mistake they made in increasing the corporate tax rate.

Mr. Speaker, 17 per cent is higher than Prince Edward Island or New Brunswick by 1 per cent and 2 per cent. The small business taxes now come down to 7.5 per cent. That will make us more competitive than Nova Scotia, but less competitive than Prince Edward Island. On payroll tax, Mr. Speaker - there is a beaut - there is another sham, cut out the school tax.

AN HON. MEMBER: (Inaudible) the school tax.

MR. WINDSOR: Cut out the school tax, increase personal income tax. They collected twice as much from payroll tax as they ever collected from school tax.

MR. WINSOR: And put it in the Treasury (inaudible).

MR. WINDSOR: Tried to put it forward. The former minister introduced it as a health and education tax. That wore thin after awhile when the people saw through it. Now it is going to replace school tax. Next year's Budget, we will see; what will it be then? That will be the balance of personal income tax or something, I suppose. We keep changing the name. The pain doesn't decrease. The pain doesn't change at all.

The minister announces that there will be no payroll tax for new businesses. How many new businesses do you know that start out with a payroll of more than $100,000 in the first year? Precious few.

AN HON. MEMBER: Halley Hunt.

MR. WINDSOR: Some, yes, lawyers maybe.

AN HON. MEMBER: Fortis.

MR. WINDSOR: Some have payrolls greater than that and don't even go to their office. They are in the House of Assembly.

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: But I welcome the fact that if there is an increase in employment this year with a company there will be no increase in payroll tax, so it is frozen for one year. At least now, employers know they can increase their payroll without being penalized. It had no impact on their profitability, whether or not they were making any money, but at least now they won't pay more money on the payroll tax.

If there were any fish plant operators operating in the Province - I guess there are still some; yes, of course, there are, particularly on the South Coast - at least now they know that they will not be penalized because they hire more people to work in their fish plant this year, presuming they have enough fish to keep her going.

How did this government come from $150 million down to, now, $78 million? - first of all, by playing games. We stood here, day after day, saying to this government - and I said it again yesterday - take the advice of the economists who are saying the way to end the recession is to spend on infrastructure. Do some capital spending. And we qualified that by saying that you don't borrow like drunken sailors, you borrow responsibly. You may have to cut back on other areas but you stimulate the private sector.

What has this government done? They have allowed $24 million that they fought for, and were allocated by this House of Assembly last year, to sit there. They did not spent that $24 million. And that is three years in a row, if my memory serves me correctly, that this government was left with capital funding at the end of the year. So, instead of stimulating the private sector, instead of creating jobs by creating work for the private sector, this government has stifled the private sector.

Hundreds of contractors are out there sitting with equipment idle. People are on unemployment and this government has $24 million that they don't want to spend this year, to try to cook the books a little bit more and pretend that the deficit all of a sudden has been reduced from $150 million down to $78 million. You can reduce it to nothing if you stop spending.

AN HON. MEMBER: Just enough to build another Sprung.

MR. WINDSOR: Another Sprung, Mr. Speaker - listen to him! The payroll tax you collected this year could build three Sprungs. It could build three of them. What would they do without it? What would they do without Sprung - if they didn't have anything to talk about.

How many doorknobs could you buy for the price of Sprung? There were no golden doorknobs on Sprung, I will tell you that, not a one! We didn't spend $70,000 putting wallpaper on Sprung either!

SOME HON. MEMBERS: Hear, hear!

MR. WINDSOR: So, Mr. Speaker, $24 million of this great piece of work they did in the last three weeks came from not spending the capital money that was allocated to them. $14 million came from Crown corporations. That must have been a lot of worry for government, to tell Crown corporations to cut back. We have not heard yet which Crown corporations they are. Maybe it is the Liquor Corporation. Maybe there is an increase in liquor hidden in here somewhere. Who knows? It is not Fortis. That is for sure. You can be rest assured of that. Twenty-four million dollars, Mr. Speaker, came from government departments, programs are now cut to the bone. No positions are being filled. There is a 1 per cent reduction in the overall salary allocation.

Well, you can maybe manage that for a three month period by simply not re-hiring, but over the year that 1 per cent amounts to 2 per cent, or 3 per cent, because there is only one third of a year left to go so that's a 3 per cent reduction for the balance of the year and now we are looking at about a 5 or 6 per cent reduction for next year. It is physically impossible, Mr. Speaker, to achieve a 5 per cent reduction, an overall compensation package, without either rolling back the salaries, reducing the number of positions, or giving up other benefits like pension plans, medical plans, severance packages, vacation pay, compassionate leave, or family leave, whichever you wish to call it. It is impossible to reduce by 5 per cent without reducing those things. Anyway you want to call it, Mr. Speaker, it is a 5 per cent rollback. In fact it is a 6 per cent rollback of benefits to public servants in this Province. You can cut it and you can paint it anyway you want, Mr. Speaker, but that is what it amounts to. Once again the public service of this Province is going to pay the price for the sins and the ineptitude of this government. Absolutely true.

SOME HON. MEMBERS: Oh, oh!

MR. WINDSOR: Mr. Speaker, I told them many times what I would do. There is a great deal more we could say about this particular document. There is a great deal more that can be said once we have an opportunity to read into the fine print. I suspect, as we have discovered in every previous Budget this government has brought forward, once we got into the fine print, they tried to cleverly disguise the real impact of what they were doing. They have not done quite as good a job this time, I do not think, but no doubt there was more left in there.

I spoke yesterday about the 171 fees and licences that were being eliminated but it turned out there were only seven licences being eliminated, seven licences only in the 171 licences turned out to be maybe twenty-five or thirty when you take out the different categories. That is the kind of methodology this government uses to bring forward a document and try to put it forward as a reasonable document. As I say, Mr. Speaker, there is a great deal more we can say, and we will. My colleagues will have an opportunity to speak. I will not get another opportunity under the rules of the House to speak again on this. Let me summarize by saying it is an admission of failure, it is a gross admission of failure. It is an admission that everything they have done in the past four years has been wrong. They are finally taking some of the advice we on this side of the House have been giving them. They are finally realizing that we are non-competitive with other provinces of Atlantic Canada when it comes to corporate taxation. They are going to put the burden for that on the public service and the taxpayers of this Province. Yes, Mr. Speaker, the oil will flow, the fish stocks will regenerate, the sun will shine, and the Liberals will be no more.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for St. John's East.

MR. HARRIS: Thank you, Mr. Speaker.

The message in the minister's financial statement this morning is very clear, and that is that the public sector workers of this Province have stood face to face with the government and the government has blinked. I know, Mr. Speaker, why the members opposite stood up and clapped the minister when he finished his speech, because they're still reeling from the shock that they got from the public sector workers, from the meetings with teachers over the last couple of days, from the words spoken by the nurses and their adamant refusal to accept the plans of this government to roll back their wages.

Now that's what happened here this morning. The government has responded to that challenge and to the threat that the public sector workers of this Province - the teachers, the nurses, the health care workers; the people who work directly for the government, its clerks, highways, Crown corporations - all of these workers said loud and clear that they were not going to accept further cuts by this government to their wages or a wage rollback.

I think it's a good thing that the government is listening to what's going on around this Province. Perhaps they're also listening to what the International Labour Organization has said in condemning and criticising their legislation, which for two years running has interfered with collective agreements already signed. But they didn't go farther. They didn't say they weren't going to change the Workers' Compensation legislation and stop interfering with the collective agreements with respect to the top-up. They didn't go further and say they were going to re-institute total collective bargaining on the issue of workers' compensation benefits.

They have made some steps though, and I have to commend them for listening.

AN HON. MEMBER: Thank you.

SOME HON. MEMBERS: Hear, hear!

MR. HARRIS: Because the vast majority of people in this Province respect the rights of collective bargaining, respect the fact that public sector workers deserve to be treated with dignity and fairness, and not to be treated as the whipping boy of the public, with an opportunity of government to change the collective agreement whenever they feel like it.

I welcome the changes to Bill 17 which will allow full collective bargaining in the public sector. This government, Mr. Speaker, over the last two years has destroyed any possibility of harmonious relationships. They've prevented any respect for the government's agreements. No public sector union leader could come and talk to this government and make an agreement and believe that they could go away after a handshake or even after a signed agreement and know that they had a deal that they could rely on.

That has to change. I'm not yet convinced that it will change. But at least there's some sign that the government is backing off its arbitrary interference with collective agreements and perhaps listening to the criticism of such august international bodies as the ILO. They said in their most recent report that the kind of legislative action that this government was taking and had been taking was going to lead and severely prejudice the labour relations climate in this Province. It has done so and there's a big repair job to be done.

There is some hope in the following facts. The minister spoke of the renewal of or the attempt to maintain the services that we have. Our great Medicare service, other public services that we must ensure are maintained. There is some hope in that, because the workers of this Province, as represented by their unions and by the Federation of Labour, are very much in the forefront of support for these programs. For programs of Medicare, health care, social services, public welfare benefits. These programs must be saved and in fact improved.

It is that kind of co-operation that you can get to maintain those services, to maintain those programs. You will get the co-operation if you do not have hanging over the heads of the negotiators, the threat and the weapon of legislating their contracts out of existence. If the government, Mr. Speaker, is prepared to commit itself to doing that than they may have the ability to win back some negotiating ability with the public sector unions.

There were some criticism of a couple of unions, Mr. Speaker, by the government for not being co-operative with the government. I am surprised, Mr. Speaker, they got any co-operation at all with the kind of attitude that they have been operating under over the last couple of years and the legislative measures that they have taken to claw back benefits negotiated in collective agreements.

The history, Mr. Speaker, of what this government has done is worth reviewing because they have, Mr. Speaker, in successive years introduced legislation in Bill 16 that had the effect of clawing back pay equity provisions, rolling back increases and announcing layoffs to the public sector, Mr. Speaker. In Bill 17 they continued the rollback of collective agreement gains and they put a cap on collective bargaining of 3 per cent in the public sector after April 1st, 1993. Now, I do not look forward, Mr. Speaker, to restrictions on the compensation envelope and expect public sector workers to bargain within that. I do not think, Mr. Speaker, that that is an appropriate way to go. You cannot tell the public sector employees that they alone are responsible for reducing that amount of money.

So, Mr. Speaker, while the official opposition may criticize an income tax increase, we the New Democratic Party, Mr. Speaker, see that as representing everybody paying their fair share of what the economic problems of the Province are. We see that, Mr. Speaker, as everybody paying their fair share.

Now, Mr. Speaker, I have a different view of the deficit and a different view of the causes of the problems that we have here in Newfoundland. We are victims, Mr. Speaker, of economic mismanagement on a gigantic scale. A mismanagement of the economy of this country and of this province on a grand scale, Mr. Speaker, because the Government of Canada - and it is more the Government of Canada than this government - the Government of Canada, Mr. Speaker, has a tremendous responsibility for causing us the problems that we are facing in this Province today. Their management of the federal economy, their management of the money supply, their management of the interest rates, all have conspired, Mr. Speaker, to have us believe and to put us in the situation where the public debt has become unmanageable and in fact, Mr. Speaker, the public debt has had the effect of transferring the wealth of this country to private investors.

There is a different way, Mr. Speaker, there is a different way and there is a different approach. We talk about the public debt and the Minister of Finance has talked about it in terms of the amount per family of the public debt and the amount per family of the interest payments. Well, Mr. Speaker, in Canada today the deficit as a percentage of the gross domestic product, in fact is no higher today, in fact it is lower than it was in 1981, and for the last eight years as a percentage of the gross domestic product the deficit has in fact decreased. The deficit as a percentage of the gross domestic product has in fact decreased.

But, Mr. Speaker, we have critics of the deficit, including the Prime Minister, saying it is unfair for us to pass on our debts to future generations, but the future generations will be much worse off if, instead of a deficit that we pass on to them, we pass them on a country plagued with ill health, poor health care, poverty, joblessness, lack of education, crumbling public services, crumbling schools, crumbling highways, that, Mr. Speaker, would be a far worse legacy than a public debt that is responsibly managed and public services that are responsibly undertaken.

Now there is, Mr. Speaker, an opportunity in responsible negotiations with public sector unions over the next period of time to look seriously not just at the collective agreements. Government, Mr. Speaker, and in particular finance ministers like to look at public sector unions and collective agreements and find ways of cutting back, saving money, shaving off benefits, rolling back to a worse time the benefits of workers. But, Mr. Speaker, why not get the unions involved in trying to find efficiencies in the public sector? Why not get the unions involved in committees, which they have offered and have been turned down, to try and help redefine how certain management practices might take place to achieve efficiencies in the delivery of public services?

Why not include them in finding ways to more efficiently deliver the health care services of this Province to all of our people? Who knows more about the delivery of health care than nurses and nursing aids and hospital workers and people who are involved in the day to day level, who know where waste and mismanagement are having a serious effect, not only on the health of patients and the delivery of services, but also on the cost? I am convinced, if government is serious about redefining and maintaining some of these most valuable programs such as medicare, I am convinced that there are ways that can be found, not just to maintain these services but actually improve them and deliver them at a cheaper cost.

I am convinced that that is possible, but it cannot be done if the approach of government is to sit down across the bargaining table with the sharp pencil, looking for ways of taking back benefits out of collective agreements, or hanging over these same negotiators the threat of coming here in this House and legislating those agreements and benefits out of existence. There has to be, Mr. Speaker, a commitment by government to respect the bargaining process, a willingness by government to open up the content of collective bargaining to more issues other than just paying benefits. That can only be done if there is an aura of good faith about the negotiations on both sides. I heard an hon. member say: on both sides, and I agree, good faith and a commitment that the bargains that are made will be honoured.

Why not, Mr. Speaker, in workers' compensation area? We know that the real crunch on monetary problems in the workers' compensation is not coming for a number of years, some say four or five, others say ten or eleven. Why are we reducing benefits now, why not set aside a two-year period and say: okay, the unions of this Province, public sector unions, private sector unions, all unions, employers, the people who are paying for the system, give them the challengeto find ways of reducing the long-term costs of workers' compensation. Give them a period of time. Say: You go out, you work it out, you find ways of improving that system, and here are two years to do it. Then in the absence of solutions, if the solutions are not found, the government will do what it has to do.

That is a more responsible attitude, Mr. Speaker, instead of two weeks ago, as the Minister of Finance did, hauling in the public sector unions and saying: Look, we want to take money out of your pockets. If you don't agree with us, we are going to do it anyway. That is what they said, Mr. Speaker. That is the kind of consultation the Minister of Finance has undertaken: We want to save money from your paychecks. You tell us how to do it in the next two weeks or we will do it ourselves. Mr. Speaker, these unions, with their responsibilities to the members, said: No, we are not going to agree that you should take money out of our pockets and out of the paychecks of our members. And they were right in doing so, Mr. Speaker, because that was what they had to do.

So I don't buy what the official Opposition has been saying, Mr. Speaker, that this was a ruse. This wasn't a ruse. This wasn't some pretend game that the government came up with - let's scare people to death and then ease off. No smoke and mirrors here, Mr. Speaker. There was a definite, direct intention on the part of the senior Cabinet - and I don't know who the senior Cabinet is, Mr. Speaker, but they know who they are. There may be only one or there may be two, but the senior Cabinet, Mr. Speaker, had every intention in the world to roll back the wages of public sector workers. The public sector workers have said no, and the Liberal backbenchers have agreed with them. I think that that is a good thing, Mr. Speaker.

What is remarkable, Mr. Speaker, is, all of the sudden, in a matter of two weeks, we found $24 million here, we found another $10 million here, another $2 million here, another $3 million there, and really it is not necessary at all. That is what is amazing, Mr. Speaker, that in a matter of two weeks all of a sudden the crisis is resolved.

Now, granted, some of the measures are stiff, and I don't take lightly a 3 per cent increase in personal income tax. I think it is a very serious amount and many people are going to start wondering once again, why is it that we, in Newfoundland, have to pay so many taxes to live in this Province and get the public services. We will have to reexamine the whole relationship that we have within Canada. The whole fiscal arrangements have to be looked at, Mr. Speaker. I think the time has come when we have to have another look a this whole federal/provincial relationship.

We have to make sure that Newfoundlanders don't pay an inordinate price, Mr. Speaker, to get the level of public services that we deserve. Mr. Speaker, at least this heavy burden of an increased income tax is shared and put in place as a progressive tax which taxes the wealthier more than the ordinary working person who is using most, if not all, of his or her money to look after the basic needs. At least, Mr. Speaker, the tax that we are talking about today of 3 per cent is shared amongst all and particularly amongst those who can afford to pay.

So I do commend the government on that. I commend them for listening. I ask them to go further in the coming weeks and months and open their hands to a true cooperative effort in trying to resolve the financial problems and the problems in the public sector without the weapon of legislating away collective agreements.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the member for Eagle River.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: Thank you, Mr. Speaker.

I am very pleased to rise here today and speak in support of the statement by the Minister of Finance. Let me say, Mr. Speaker, at the outset, the people of Newfoundland and Labrador today have recognised once again that we have put into place a government that is fiscally responsible, that has the principles of Liberalism forefront in their political and governmental agenda. We have today a Minister of Finance whom we can all be proud of in this Province.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: What we can say today, Mr. Speaker, is that the scaremongerers have come up nil. We can say that the doom-and-gloomers opposite have struck out again. We can say from the response of the Opposition, the critic over there this morning didn't know whether it was night or day. He didn't know where he was, Mr. Speaker.

The NDP couldn't wait to get to their feet to congratulate the government on what they have done. That is what the people out there saw today - a demoralized, disillusioned Opposition who couldn't believe their ears that this government has been able to look at this problem and deal with it as effectively as we have.

I want to use the few minutes that I have to talk about fiscal responsibility, about labour relations, and about, most fundamentally, the principles of Liberalism as it relates to the business stimulation that we have given in this particular statement, and also the retention of our social conscience.

In terms of fiscal responsibility, we cannot escape and we have never tried to escape from the principles of fairness and balance. We have gone out there right from day one and said, we cannot be extremist and say that we are going to spend our way out of this problem. We cannot be like the socialists of the country who want to go and borrow and borrow until their banks say borrowing cannot go on any longer. That is not the responsible action to take. This government could not go that way and neither would our principles let us go that way.

Neither could we go and say to the public servants of this Province, to the hospitals and educational administration of this Province, 'Everything is going to be cut, and you are going to have less services in this Province than you have in other provinces. We could not do it on the backs of the workers of this Province alone and we certainly lived up to that today.

Of course, we also recognize that there is not an endless pot of tax revenue to be gathered from the workers of this Province. We could not go out there and say: We are going to put the taxes up without limit so that we can again take the revenue from that source and be able to spend our way out of it. What we have done is we have taken a prudent, responsible, pluralistic approach, a balanced and fair approach, to dealing with our problems.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We have seen the government here today, through the Minister of Finance, say that we have to be responsible when it comes to borrowing. We have to be responsible when looking at tax increases and responsible also when looking at maintaining the integrity of our social programs and our commitment to health and education in this Province, in particular.

Mr. Speaker, it would be remiss of me, and, I think, of this government, if we didn't give a comparison between what the previous government did under these circumstances and what we have done here today. The people of this Province must have that comparison to say whether we are doing right or wrong, whether we are making progress or not. And I would submit that once the results are out, once we are measured up against the performance of the previous government, there will be no doubt in the minds of the voters of Newfoundland and Labrador.

Let's look at what happened in the early 1980s when there was 8 per cent growth each year. Let's look at what happened when there were hundreds of millions of new dollars coming into this Province each year. What did that government do when it was in power? Did it take the responsible course and say, Let's still be prudent managers, let's still maintain our standards, let's still look at how to repay some of our debts, let's look at trying to secure our pension funds? Did they do that? - no, absolutely not. They went out and spent like drunken sailors, spent us into oblivion. That is the clear record of what happened out there.

Now, nobody will forget that infamous day in January, 1989, when the Premier of the Province had to come before the people of this Province and say, if we do not exercise political courage, we will be going back to 1930; if we do not take this course of action, we will be back to the Depression years. That was the kind of political leadership we had in January 1989. And the people of this Province were wise. They said: 'We are not going to allow our Province to be continually run by a blown mind.' That was it. He said: 'It is going to blow your mind.' 'It would blow your mind,' he said, and 'We are going back to the Depression.' And the people said: 'Thank you, Sir, but no thanks. We are going to put a Liberal government in and take care of the responsibility for our children in the years to come,' and that is what they did!

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We did not turn our backs on the people of this Province. We executed the mandate that they gave us and we exercised the political courage necessary to deal with the finances of this Province. We did that on the basis of fairness and balance, and that is why today we still have the approval - the unaltered approval - of the public of this Province for the political and the governmental actions we have taken.

Mr. Speaker, there are no lessons to be learned either, from the previous government with respect to labour relations. When it comes to labour relations, we have no lessons to learn. We know what Bill 59 was all about in the previous government. We remember the scenes on TV when they were saying, 'You are going to be on the street,' because that is how they wanted to manage the Budget - they wanted to get the public servants on the street to save a few taxpayers' dollars. They didn't care about services, they didn't care about the education of our children, they didn't care about the health of our people, they wanted to get people on the street so they could save a few dollars. That was the mastermind; that was the key element of their fiscal strategy. I say, shame on them! The people of this Province are not going to forget that very easily, Mr. Speaker.

We now know that collective bargaining is alive and well in this Province. We now know that collective bargaining is out there for the unions, the responsible unions, to take advantage of. We now know that there is an open door to the Minister of Finance - an open-door policy.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We now know that the Minister of Employment and Labour Relations has introduced the reforms in the Labour Relations Act that will see collective bargaining alive and well.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: I say today, we have seen another watershed statement on labour relations to bring labour relations into the 1990s, able to get unions to act responsibly, able to get unions to come in and say: Let us put aside our political agenda and deal with the real needs of the people of this Province.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: We now have the door open. We will be able to negotiate and be able to take back, and look honestly in the eyes of the workers - and they will have a government that listens. We are not beyond making a mistake from time to time - we are human, but we are a compassionate government. We are people who take our responsibility seriously and are looking out for the future of our children. Let nobody ever forget that.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: So we have done that, and I submit, we have done it in spades.

There are no lessons to be learned either, from the Opposition, with regard to acting responsibly in labour relations and with the labour unions. The critic this morning, and the NDP, have stood and said that we went out and tried to raise fear amongst the people about rollbacks. Mr. Speaker, it was not this government that did that, Mr. Speaker. And one member of the Opposition said there was never any intention - How are we responsible, Mr. Speaker?

As for the NDP, I would submit, let them look no further than to their NDP and socialist cousins in Ontario. Let me read, Mr. Speaker, what the treasurer of the Ontario NDP said a couple of days ago. Was he fear mongering? What was he saying that this Minister of Finance never said? He said, and I quote: 'If unions don't keep to low wage demands he will be forced to consider wage freezes and wage rollbacks in the areas which rely on the provincial government for financing such as social services, hospitals, universities, school boards and municipalities.' Rollbacks, the treasurer of the NDP government in Ontario said. Now then, Mr. Speaker, that was not the Minister of Finance for Newfoundland and Labrador, that wasn't the Premier of Newfoundland and Labrador, that was the treasurer, the Minister of Finance of that NDP, that great socialist conscience in Ontario; that is what that was, Mr. Speaker.

Let there be no mistake about our position when it comes to trying to deal with the finances of the Province. We have a much different approach and, as I said from the outset, Mr. Speaker, the most important, the most fundamental aspect and the most key element of this statement that I am so happy and proud to be able to stand here and support, is the fact that we have been able to deal with this financial adversity and keep our social conscience.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: That is the key. Because liberalism will not falter when it comes to dealing with the education and health of our people. This year, the Minister of Health and the Minister of Education, the Minister of Education, in particular, are saying that there is $48 million, more money this year, in the education budget than there was the previous year. Now, Mr. Speaker, that is the kind of funding that is there. Let there be no fearmongering out there in that great society of ours that there is a tremendous cutback to education in this Province, because there is not.

Let me say to the health department and all the health care workers out there, contrary to what the unions have been telling you and what the Opposition have been preaching, Mr. Speaker -

AN HON. MEMBER: Certain unions.

MR. DUMARESQUE: Certain unions, yes, I would have to categorize that and say certain unions have done that intentionally, Mr. Speaker. But in health and education, have we seen less money this year than we did in the previous year?

SOME HON. MEMBERS: No!

MR. DUMARESQUE: No, Mr. Speaker, there is $22 million more in health this year than there was last year, Mr. Speaker. That is the kind of commitment that we have taken, and the answers must be clear, the message must be clarion, Mr. Speaker. The people out there must be told the truth, contrary to what the Opposition want to stand up and promulgate, Mr. Speaker. We will not stand for it. We are here to be given the responsibility to govern, and govern we will.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: And govern we will, I submit, for some time to come, Mr. Speaker. In my own riding, we have had the Liberals there for forty years, Mr. Speaker, and forty more will follow.

Now, Mr. Speaker, you will note something remiss this morning with the Opposition - with all the doom and gloom that was projected on our society this morning, Mr. Speaker, with all the fearmongering that was put out there, where they said that we were going to abdicate our responsibility, what would be the natural thing for the Opposition to ask for this morning?

AN HON. MEMBER: An election?

MR. DUMARESQUE: The 'E' word, Mr. Speaker. We have not heard the 'E' word this morning. They cannot go to the people and say what they have said in the past few months, Mr. Speaker, and the past few weeks.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: They cannot go out to the people and say that we are going to put more fear into you because the record is clear, the Minister of Finance was clarion in his statement this morning and the people out there are comforted knowing that they put a government in place in this Province that was unswerving in its commitment to keep its responsibilities and its principles intact, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. DUMARESQUE: I am sure, now that we have prompted them, now that we have pickled them, now that we have driven them to a frenzy, that they have forgotten the 'E' word, maybe they will now go out and say: What is 'election'?

AN HON. MEMBER: They are still going to say it, are they?

MR. DUMARESQUE: They might try to get it underneath all the (inaudible) words - What is 'election' now? Some chance, Mr. Speaker! It is not going to be the leading question in Question Period, I can tell you that - When is the election? And you know, if I have done the deed, if I have prompted them, if I have driven them into the 'E' word, then of course, what will we say? We are proud to go to the people of Newfoundland and Labrador knowing that we have done the job they gave us in 1989 and I am confident they will re-elect us.

AN HON. MEMBER: They will say it now, boy! They will say it now. You have frightened them into it.

MR. DUMARESQUE: So, Mr. Speaker, the record is clear, the statement is there. It is too late now, when they had 8 per cent increases in transfer payments, to say they are not going to spend like drunken sailors. It is too late to repent now, it is too late to go to the people now and say, 'It will blow your mind.' It is too late to go now and say, 'this long, this long - six days.' It is too late to do that now, the deeds are done, the die is cast. They are in Opposition now, and they will be for some time to come. That is what the people want. And, certainly, I would have been very, very disappointed if the Minister of Finance had not lived up to the expectations of the people. And, in concluding, Mr. Speaker, I would have to conclude on that.

The Minister of Finance of this Province and the President of Treasury Board, have maintained the principles of liberalism: compassion, tolerance, moderation - moderation and tolerance, the tenets of liberalism going back to Mackenzie King. We have lived up to them in spades, and I say to the people of Newfoundland and Labrador: Listen more to the government that you trusted and not to the scaremongering - a fear that the Opposition mentality in Newfoundland and Labrador today are trying to put into you. I say, Mr. Speaker, that when the time comes to put our record on the line, we will have no apologies to make.

I certainly know, in my riding of Eagle River on the Coast of Labrador, that we will have no apologies to make, Mr. Speaker. I say to the Minister of Finance and the Government of Newfoundland and Labrador: Carry on, because the people of Newfoundland and Labrador are supporting you for the responsibility, the honesty, the integrity and the commitment that you display day after day, week after week and year after year. We are going to continue to do what is right and proper for the people of this Province.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Opposition House Leader.

MR. MATTHEWS: Thank you very much, Mr. Speaker.

It is my pleasure to rise today to take part in this debate. First of all, I say, it is too bad that the people of Eagle River could not see the display this morning by their member. He would not want an election because he would get one big boot, I say to him. What an immature display, on a morning in this Province that people have been waiting for now about two months, where once again, we see this government taxing people once again - and they are talking about no rollbacks.

Mr. Speaker, there is a rollback for everyone in the Province. Every wage-earner in this Province is being rolled back once again by this government. And for the Member for Eagle River to stand up and get on with his nonsense and his immaturity - what an immature member, Mr. Speaker. It is too bad the union people did not stay in the galleries and listen to him. Certainly, they could not stay and listen to him - how could they?

He talked about fearmongering and scare tactics. Who started it all? Clyde K. Wells started it all when he called the unions in and then went on public television and told the people of the Province that everything was on the table. Everything was on the table. Wages, pensions, rollbacks, were on the table. That's what Clyde K. Wells told the unions and the people of this Province.

The Minister of Finance said, indeed, he was considering rollbacks. The last two caucus meetings of government members were nothing short of a civil war because of the fear of rollbacks, I say to members opposite - and the beating they were taking in their districts when they went out on weekends and out to meetings, the beating they took. There was civil war in the caucus over the possibility of rollbacks, I say to members opposite.

What have they done this morning? They are trying to get the public service of the Province to say: Thank you for nothing. Thank you for nothing once again, Clyde and company, thank you for nothing. We have brought in Bill 16, we have had Bill 17. In Bill 17 we said: You may negotiate a wage increase up to 3 per cent.

Now, if I were the unions I'd be very suspicious. I am glad Bill 17 is gone. But do the unions realistically expect that they are going to be able to negotiate a 3 per cent increase with this government? I doubt very much if they believe that. There are going to be more people laid off in the public service and those who will be left working will not have anything to do because the programs are going to be gutted. That is what this Minister of Finance announced here this morning, a gutting of government programs. Those who are left in the public service, what will they do day-in and day-out? Because the reality and the truth of this statement this morning is going to take a while to unfold.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: It is going to take a while to unfold. I remember when the former Minister of Finance stood in his place a couple of years ago and referred to his Budget as the common man's Budget. Once word got out of what was in the common man's Budget, the Minister of Finance and the Premier and the government in this Province were almost lynched.

You talk about hypocrisy, Mr. Speaker! The Minister of Finance this morning stood and said that other members in this Legislature had suggested borrowing. He chastised members for suggesting that the Province borrow. He talked down at people for suggesting that. Then, about four minutes more into his speech what did he announce to the people of the Province? He is going to borrow how much?

AN HON. MEMBER: Responsibly!

MR. MATTHEWS: How much is he going to borrow? - $70 million or $80 million, that's all - only $70 million or $80 million more. Why didn't he borrow in March and bring in a realistic Budget for the people of the Province, instead of trying to be so deceptive? - a government filled with hypocrisy and deceit, Mr. Speaker.

Buying time is what this statement is about - 'Give me five or six more months to pull the wool over your eyes, public servants. Give me five or six more months to pull the wool over your eyes once again.' That is what we got here this morning.

I want to say to the Member for St. John's East, I don't thank the government for anything. I ask the Member for St. John's East, What are you thanking them for? Nothing!

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: You are thanking them for nothing. You want the burden shared on all Newfoundlanders and Labradorians.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

MR. ROBERTS: Guys, let him dig his own grave.

MR. SIMMS: Clyde is gone, yes.

MR. MATTHEWS: Speaking of digging graves, I say to the Government House Leader, I hope that he has his funeral pre-arranged. We know who will pay for it.

SOME HON. MEMBERS: Hear, hear!

MR. MATTHEWS: Share the burden equally throughout the Province, says the Member for St. John's East. Slap them with another 3 per cent on top of the already 1.5 per cent income tax increase in January. Tax them by 4.5 per cent more, the Member for St. John's East said. The same people of whom this government have frozen their wages for two years and taxes them by another 4 or 5 per cent and you say, thank you, Mr. Wells and company. That is what he said here this morning, I say to him. Thank you for freezing the wages of the people I am suppose to stand up for but tax them 4.5 per cent and say, thank you, that is what he said. That is exactly what he said here this morning. I do not know how he can sit in the chamber and take it. He should leave. Thank you very much for nothing. What are we seeing here by this government this morning? What have they announced this morning? Why are the members who have gone through two weeks of civil war in their caucus pretending to be so happy this morning? Do they honestly think that the free collective bargaining they are referring to is going to take place when they are looking at a $250 million deficit next year? Oh, yes, it will be free collective bargaining - with no wage increases for another year. Where are they going to find the money to give an increase? So what is the free collective bargaining going to be about?... layoffs and the extent of layoffs, the cut of services, and the extent of services that will be cut. That is what we are going to see.

We will see, come January or February, I say to members opposite who made snide remarks on the side to their colleagues, we will see come January 15 or February 15 just what is contained in the economic statement this morning. Wait until the layoffs start in the departments and in the government offices out and about the Province once the word gets out on what is really contained in this financial statement this morning. That is what we are going to see. The big delight this morning was there were no rollbacks. Do not think for a minute that there are not going to be public servant's heads roll because of this, I say to members opposite.

The smirks on your faces will not be as bright come the middle of February, and the smirks on your faces will not be as gleeful come the next fiscal year when they deliver another Budget, if they have the intestinal fortitude to do it before they go to the polls. I say to the Member for Stephenville there is $250 million you are going to have to deal with. We left them with a surplus and in their first Budget, Mr. Speaker, they predicted a $10 million surplus, but you know what they came in with at the end of the year?... a $117 million deficit. It is not too much difference. How much is that? $127 million difference. If you combine all their Budgets do you know what they have been out since they have been in office? In excess of $300 million to date. That is not counting the Budget that is going to come in March or April. They are already saying there is going to be another $250 million so if they bring in a Budget in the Spring before they go to the polls we are going to be looking at somewhere around $400 to $500 million.

MR. FLIGHT: What do you want first, an election or a Budget?

MR. MATTHEWS: I could not care less I say to the Member for Windsor - Buchans what we have first because either way the government cannot win. Either way the government cannot win because if you go without a Budget no one is going to trust you. I say to the Member for Bonavista South who is over there laughing that he was not laughing last week in Clarenville Monday night or whenever it was. He was not laughing and a lot of members opposite were not laughing. There was no laughter last night out in Conception Bay, no laughter when the Minister of Environment and Lands in reacting to what government would do said that if employees at the Waterford Hospital stole less food the government might not be in such a serious financial situation.

AN HON. MEMBER: And she talked about crossing the House.

MR. MATTHEWS: Yes, she did at the teacher's meeting in CBS. She said if there was not so much stealing of food at the Waterford Hospital, I say to members.

MR. TOBIN: It's been on the radio all morning.

MR. MATTHEWS: Yes. I do not know what kind of stress the poor lady was under, but it was something.

AN HON. MEMBER: Remember when she said she thought about crossing the House?

MR. MATTHEWS: Oh, she thought of crossing the House, yes.

MR. TOBIN: Every day she thinks about that.

MR. MATTHEWS: She thinks about that every day.

What a letdown to have a former President of the - two of them here in this Legislature, and to sit there this morning and delight in the actions they have taken again. They are so delighted that they did not roll back the wages of public servants. They are so delighted that they did not roll back the wages of public servants - not that they gave them a two, three, four, or five per cent increase - they did not roll them back; and they are elated. After freezing their wages for two years in a row with Bills 16 and 17, they are delighted they did not roll back their wages this morning. What does that tell you about this government? What does that tell you about this government, that you would be delighted that you did not roll back their wages?

AN HON. MEMBER: (Inaudible) incompetent.

MR. MATTHEWS: What incompetence! What have you come down to? What have the people of this Province - it is unbelievable.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Two per cent rollback on all take home pay. That is about what it amounts to. That is what they announced this morning.

MR. TOBIN: Anybody who pays income tax.

MR. MATTHEWS: Of course, those paying income tax -

MR. TOBIN: Their take home cheques (inaudible).

MR. MATTHEWS: Their take home cheques will be reduced by 2 per cent as a result of the announcements of the Minister of Finance this morning, and members opposite are absolutely delighted - absolutely delighted - and they are nodding their heads.

AN HON. MEMBER: When they get their cheques (inaudible).

MR. MATTHEWS: Of course their cheques are going to be cut too. They will not be so happy about that, I suppose.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: The fiscal direction of this administration has not worked. The fiscal policies of the Wells' administration has been counterproductive. Our provincial economy has continued to shrink since they have come to office. No one can deny that.

The actions that they have taken with laying off 2,500 to 3,000 public servants, by drastic tax increases, has not improved one iota the bottom line, the financial position of this Province. No one opposite can deny that. The financial position of this Province has worsened annually since this administration took office - very counterproductive. They have shrunk the economy every year. They have inflicted additional shrinkage in our economy.

This morning they go and announce, on top of a 1.5 per cent personal income tax increase that was announced in the last Budget, they are now adding another 3 per cent, so the personal income taxes are going up by 4.5 per cent in January, and members opposite honestly think this is going to help the economy and the financial position of this Province? It is going to worsen the situation, I say to the former Minister of Finance who always sings out: What would you do? I would not do what he did, I tell you that, because he put us in the state we are in.

Mr. Speaker, as the Member for Mount Pearl said when he reacted to the statement, the 5 per cent reduction in the compensation packages - what does that mean? Does that mean there is an increase?

MR. TOBIN: Free collective bargaining.

MR. MATTHEWS: Free collective bargaining, but he announces a 5 per cent reduction in the compensation packages. So what is this free collective bargaining? Is he going to call them in and say: You have to take a 5 per cent reduction. We ask you to take a 5 per cent reduction in your compensation package. Is that free collective bargaining? They are going to bring them in to discuss this option?

Five per cent reduction in compensation packages, coupled with 4.5 per cent increase in personal income tax, and what are you doing to the people? Are there going to be more dollars to spend in the Province? Is it going to stimulate the economy? I do not think so.

Members opposite are very, very delighted with all of that - very, very delighted - but the real crunch will come in the next three or four months when the government has to bring in a Budget for the fiscal year 1993-94, facing a $250 million deficit, I say to members opposite. That is when the real crunch will come. That is when the real story should be told. It has not been told the last number of years because they have cooked the books; but if they tell the true story in March, Mr. Speaker, I don't think there'll be too many laughing faces on the other side. There won't be too many smiling faces in the Province.

AN HON. MEMBER: (Inaudible) the story if there's an election called.

MR. MATTHEWS: Yes, I say to the Member for Windsor - Buchans, I can't wait for that day. I really can't wait for the day. I'll tell you something right now, it's only within the last two hours that the minister has behaved that way because for the last three weeks - I can't describe how the minister has been because it wouldn't be parliamentary. What's been happening inside of his intestines and his system. It wouldn't be parliamentary for me to describe the state that he's been in the last three or four weeks, along with a lot of other members opposite. He has been... I can't say it, Mr. Speaker. It'd be unparliamentary and be a bit disgusting.

That's what's gone over there. It's only a show this morning. Because the writing is on the wall for the administration. The arrogance of the Minister of Education, 'Mr. Wrecker,' as he's referred to in the teaching profession across the Province. He was 'Dr. Death' in Health, he's 'Mr. Wrecker' in Education. The writing is on the wall, I say to members opposite.

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Sorry?

AN HON. MEMBER: (Inaudible).

MR. MATTHEWS: Yes, I couldn't use those words. Not even in private I wouldn't use them.

AN HON. MEMBER: Bill, you're carrying that crowd over there. I have to admire you (Inaudible).

MR. MATTHEWS: Yes, I don't know. Yes, well, if I'm carrying this crowd I say to the minister, he's not carrying that crowd. There's no one carrying that crowd. There's no one carrying it. They're off the tracks, you're off the rails. You're in deep political trouble. You're floundering now, coming in with a statement this morning that does not reflect the financial realities of Newfoundland and Labrador. You're in deep, deep trouble.

It's a nice attempt, I say to the members opposite. A nice try by the minister this morning. Buy me some time Clyde, said Wins. I'm in deep trouble. There's been a significant shift in public opinion in the Province. I'm in deep trouble. Now buy me some time. They bought some time. They know they were headed for a very serious collision with the public service unions in the Province. There's no doubt about that. Everyone knew that. Members opposite knew it. That's why they put the pressure on the Cabinet ministers to resolve and try to come through with this statement this morning to buy time. To buy time, I say to the minister. That's all that's happened this morning. Buying time.

Having said that, with buying time you have really rolled them back this morning. You've rolled everyone back this morning. Froze their wages and increased their taxes. What does that do to their buying power, I ask members opposite? Are they going to be better off because of the statement this morning? No wage increase and the personal income tax is being increased 4.5 per cent in January.

I can't be proud of that. I'm relieved there wasn't a wage rollback, very relieved. But I can' be very proud that the people of this Province who are lucky enough to have a job and earning will be paying another 4.5 per cent personal income tax in January. I think that's very counter-productive. I think it's going to worsen the coffers of the Province, I say to members opposite.

My time is up, Mr. Speaker. I look forward to hearing debate by other members.

MR. SPEAKER: The hon. the Member for Stephenville.

SOME HON. MEMBERS: Hear, hear!

MR. K. AYLWARD: Mr. Speaker, so far the best Opposition speech this morning has come from the NDP member. I have to tell you. The real Opposition spoke this morning and gave some credible arguments, credible suggestions; I'm giving the other Opposition the benefit of the doubt. Because I'm sure that during the course of the debate they will tell us how they would have handled this problem. I am sure that they are going to come in here and tell us how they would have handled this problem.

What's strange is that the federal minister representing Newfoundland up in Ottawa is not telling this government that it needs to clean up its act. But I'll guarantee you one thing, back a few years ago he was telling another government to clean up its act. When it was getting an 8 per cent increase every year in revenue, and getting increases in transfer payments, the federal government, and the minister representing the federal government in this Province, had to come down here and tell the hon. previous, previous premier, and his Cabinet - many of whom are still opposite here on the front benches on the other side - that they were spending like gosh knows what, and that they had no control over their expenditures and didn't care a whole lot.

He had a forty-five minute press conference where he lambasted the (inaudible) right out of them. Oh yes, it is all here and he goes on to say how the previous, previous, Premier talked about the Province heading to ruinous times, heading to depression, heading to the 1930's, and he said then, their colleague in Ottawa said then, it was their responsibility the way they were spending their money and the way they did not care about what the results were and so when Mr. Peckford looked at the books, the real books in 1987, in 1988, what did he do folks? He decided that he had to go, he had to leave and the reason he had to leave -

AN HON. MEMBER: He was not ruthless enough.

MR. K. AYLWARD: - that is right, he was not ruthless enough but you know that was not the word. The word was to have the courage to deal with the mess, the financial mess that they had created themselves for the most part, and that was the problem folks, that was the problem. The Member for Grand Bank and the Opposition House Leader just said a few minutes ago, he said - and he forgot when he said it because when the words came out he all of a sudden remembered, he said: this government will not have the fortitude to go with a Budget before the next election. Well guess what folks, do you remember 1989, remember 1989 when they had their leadership and everybody was running around trying to figure out who was going to be the leader and then when they figured that out - when did they have the election? I think it was May month or April. April month it was, they called it in April. Did they have a Budget? No. You know why they did not have a Budget?... because of all the bad news that was going to come down and they did not want to tell the people the truth. They did not open the House that Fall. The House had not even been opened for about twelve months.

Here we were, they went to the people, now he is over there telling us that we do not have the fortitude. Well I have to tell you, Mr. Speaker, the statement made this morning by the Minister of Finance certainly shows fortitude. It shows a lot of other things too. It shows that this government wants to let people know out there what the truth is about what is there in the books and how we are going to try and resolve it. It throws out an olive branch it says: work with us to do it. And it throws an olive branch to the people in the labour movement and it throws an olive branch to people in the business environment in this Province and I am proud of the statement today. I am sure that the Minister of Finance and the Treasury Board Minister combined are going to work hard with this government in Cabinet to ensure that these problems get resolved. But you know the confidence factor is there, Mr. Speaker, because you see, you are dealing with it up front. When I hear the Opposition, what I say to them is this: I am looking forward to hearing what they would do in these circumstances because we know what they did and we have a lot of examples of what they did, Mr. Speaker, I have many of them here as a matter of fact. I went back and did a bit more research because -

MR. GOVER: They never had zero, zero.

MR. K. AYLWARD: Well, I have to correct the Minister of Works, Services and Transportation, they did have zero and zero and of course they say though they allowed the collective bargaining process to survive. Well, you know, I went back and checked that too.

MR. GOVER: Did you?

MR. K. AYLWARD: Oh yes, and you know the strangest thing about that of course, is what they did was, they went to Cabinet and they said: well folks, we cannot afford to pay any wage increases, so let us decide to give them zero and zero. So, then they had a press conference and they announced: this is what you are getting zero and zero, then they said go collective bargaining. Now that is collective bargaining, that is a different definition I suppose, I suppose that is what it is. That is what they did but understand that when they did it the environment then, there was an increase in transfer payments, there was an increase in revenue for the Government of Newfoundland at that time, in the mid-eighties. They brought in these measures, zero, zero with three-two in different wage restraint programs when they had more revenue and way more revenue than we have.

It is unfortunate because if they are going to be credible in their criticism of this government they should be credible. They should be bringing in things and saying here is how we would handle it and you have not done it folks, you have not done it yet. The NDP member for the Opposition over there, I mean he has done a superb job this morning, as in most cases, most parts - responsible. The Member for Mount Pearl, who was a former Minister of Finance and a former Minister of Treasury Board got up this morning, I suppose he called it night instead of day, in the morning, I suppose that is the way it looked after he read the statement. You know the thing was, he never said one thing there, he never said a thing, he never said: way to go government. At least he could have said: government you dealt with this in a fairly responsible manner. That is what he should have said. Now he can lambast us for other things, no problem with that, but I mean he never said, for a person who was in a provincial Cabinet in a previous government, you would think, having had to make tough decisions before that he certainly would have had some responsible criticism of how to resolve this problem. I mean did he say to us: go borrow more money? I did not hear him say that, of course he cannot say that because he knows the difference. Did he say cut programs? No, he did not say that but yet he is saying it on the other hand because how are you going to resolve the problem?

What else did he say? I can't remember. Because most of it was loud and most of it had no detail. Not a constructive criticism whatsoever. He asked us to reduce some business taxes. We have. Where's the pat on the back? Well, I pat the Minister of Finance on the back and the Government of Newfoundland and Labrador today.

AN HON. MEMBER: He asked us not to roll back wages.

MR. K. AYLWARD: He asked us not to roll back wages. We didn't do that. Now the Ontario government, gosh knows what they're going to do. They have a problem too like every other provincial government in Canada.

AN HON. MEMBER: They borrowed heavily.

MR. K. AYLWARD: They're borrowing major heavily, and causing some problems for our own economy here. Because we've got to hope - I mean, here I am, when I go to bed at night sometimes I say to myself: Bob Rae, do the best you can. Because the better you do right now that'll help us in Newfoundland because of transfer payments. I know it's an unfortunate position for our Province to be in, but we inherited that problem, and we're trying to resolve it.

Here we have been, we've been trying to resolve this problem with less revenue from the federal government than we got four years ago. Less. It's hard to believe and fathom that that's the case. That we've been trying to deal with the problem, pay wages to all our workers, keep a level of service that is acceptable to the people, but yet with revenue that we expected to have and we don't have now. That's a significant thing for people to understand.

We're not like the mid-eighties, or the 'eighties. We don't have increasing revenues. We're working on doing that. What I'm amazed at, Mr. Speaker, when we do get our revenue back on track and when the federal government, and we get better transfer payments when the national recession ends, imagine what this government's going to be able to do with a few more dollars, I say to the Minister of Health, and the Minister of Education, and the other ministers of the Cabinet.

We've made health care reform in very difficult times. Saved a lot of money. We've got the health care - the administrators out there are right on side.

AN HON. MEMBER: (Inaudible) better system than we ever had.

MR. K. AYLWARD: And a system very effective. We're looking at more reforms. The people out there are understanding. They're starting to say - they understand. But they also know we have a financial problem. They also understand one thing else, though. That when this government works itself out of the recession, along with all the other provinces and the Canadian government, what are we going to be able to do then, Mr. Speaker?

I'll tell you one thing we're not going to do. We're going to attempt to keep that debt down and pay it down, even when we get into good times. We're going to pay that debt down. Because some day down the road somebody is going to have to pay for it. The day has got to come to a - right now it's coming at us really hard, as every other government, and as the federal government. As the federal Minister of Finance said the other day, Mazankowski, that the credit card limit is at its limit. That's what he said. The credit card limit is at its limit and he can't go and get any more. That's where we're to, that's where we're at.

So we've got to live within our means. We've got to try to correct the things that have been done in the past and work to make improvements. The only thing is, if we're going to get, like I said, we'd like to get some good suggestions from the opposite side. It'd be a pleasure to hear them. With the major expertise that we have in the Opposition, from being in former, former Cabinets, you would think, and I hope and I know we will, get some positive suggestions. We've taken some of their suggestions already and we've incorporated them in.

I'm sure that you're going to give us some very positive suggestions, the Member for Kilbride, who was a former Cabinet minister, involved in the many decisions of the former, former government, many of the decisions. Many of the zero-and-zero wage increase decisions, and many of the other decisions that they made, and was in the Cabinet that was told off by the hon. John Crosbie, the federal minister, back a few years ago. You weren't taking care of the shop then. So the front bench over there, they know what it's like to be in government.

The problem is, when you look back and see what they did in the mid-eighties, about restraint and so on, and laying off people and all this, that was when they had more revenue coming in, the economy itself was, I mean.... What would they do now, is my question? What would they have done today is the question that we should be asking people out there.

SOME HON. MEMBERS: (Inaudible).

MR. K. AYLWARD: They'd sell the shop, oh yes. I've heard that phrase before. That's the question. People have to look and ask: what would happen if they were there? We all know what happened. They wouldn't even have a budget before the election the last time. Didn't even open the House. Fall sessions were non-existent, as a matter of fact. That was democracy for you. Legislative committees, didn't know they existed. Who brought them in? This government. Trying to give legislative reform.

So you know, I find it a bit amazing. I think that's why most of them are out of the House right now, and are going to be out of the House for the next few days, as a matter of fact. Because they can't face us over here. They can't face us because they know. They're saying: how did this government manage to come up with a plan like this and deal with this crisis and problem, and most of it not even of their making, as a matter of fact. It's amazing, as a matter of fact. I have to commend the Cabinet and the Minister of Finance. Because it's been number one.

I looked at the economic statement of the federal government. They've got a major problem too, no doubt about it. When I hear the Opposition talk about our miscalculations on our provincial deficit, the federal minister, their colleague in Ottawa, how much was he off?

MR. GOVER: Seven billion.

MR. K. AYLWARD: Anybody know?

MR. GOVER: Seven billion.

MR. K. AYLWARD: Seven billion at last count, and he's projecting that he's going to be off by ten next year. I tell you, that's mathematics. I'll guarantee you. You talk about credible criticism? It is unreal, Mr. Speaker.

This government is trying to deal with a problem. It is dealing with it responsibly, and it's going to keep dealing with it as it can, but being straight with the people. We've got a problem here that when you're elected as a government you hope you never have to deal with. But we can't pick and choose any more. It's like Roy Romanow in Saskatchewan. He's facing a gigantic financial crisis up there and he's not blaming it on everybody. He's saying: we have to deal with the problem. So that means that the Opposition, who created a lot of the problem we have right now, should start

being more responsible about their comments.

MR. GOVER: Where's their plan?

MR. K. AYLWARD: Their plan is the question. Where is the plan? I haven't seen one yet. I'm looking forward to seeing the highlights of it so that we can probably incorporate that in the new Budget when we bring it in in the Spring. I'm sure the Premier will listen to the Opposition as he has in the past, and all the Cabinet. Looking forward to the -

AN HON. MEMBER: Hear them!

MR. K. AYLWARD: Hear them, yes, that's right. Listen to - well, hear them, yes and whatever. Whether or not we take their advice is another question.

SOME HON. MEMBERS: (Inaudible).

MR. K. AYLWARD: That's right. The good parts of their advice. We did, and we have in the past, as a matter of fact. So we're trying to be sensitive to that. I say to them: be credible in the criticism. People out there - you say they might not have - some people have short memories. But we're going to remind people - I'm going to remind them, I tell you that, about what we've inherited and how we've been trying to deal with it, and also that we didn't bring in the GST, by the way. We didn't bring it in in the middle of a recession. We're not responsible for that. That's had an impact on all of us, every provincial government. It's impacted on our provincial sales tax revenues, which we're responsible for. We didn't bring that in.

Now it's in there so we have to live with it. But you have to admit, you didn't have to deal with that when you were a provincial government and you had to bring in your budgets. You didn't have to deal with it. So we have to deal with that. I think it was a mistake that they brought it in at the time they did and I would hope the federal government, the federal minister, will see what he can do to lower that tax or do something with it to help address the consumer spending and so on in Canada.

Again, Mr. Speaker, we're working on the problems. We've got a way to go, but at least we have some direction laid down. I believe that the public sector unions and the leadership there are going to be very responsible in dealing with the changes that we have to try to deal with. To deal with the Budget that we have to deal with. This is a public document. Anybody can look at this and figure it out. It's not a closed book that you can't have access to. Everybody can see it, everybody can understand it.

It's a matter though, I suppose, if you want to close your eyes and not think about it. I think that everybody has to understand the position that the government is in, and understand that we're going to work together with people. That's the thing. Work together with people. Ask everybody to help us out. Look at different ideas. Employees, give us ideas. Public sector employees, give us ideas about how to save money, how to deal with the problem that is now facing not just this government. We're not the only government. We're not like - we're surrounded by other provincial governments that are out there having major successes. They're out there with major gigantic deficit problems. I'll be surprised - I'm looking forward to seeing the measures that other governments are going to take.

I tell you this, that I pretty well know now that a lot of them are not going to be as confident as we've dealt with this. Not going to be as competent. The measures (Inaudible) won't be as competent. Considering the leverage and the leeway that we've had in our borrowing capacities, with our debt levels as high as they are, I'm amazed at the government that they've been able to bring in this statement today the way they have, and to deal with it in such a responsible manner.

I'm amazed and I give full credit to government on that. I'm looking forward to seeing now people look and say: the government is listening to the people. The government listened to the people, and they continue to do so. I think that's another thing that people will understand today when they see that. Government doesn't want to inflict on people; government wants to help people. This government is trying to do that and is going to do it responsibly, and do it as best it can. Given, like I said, the parameters that it has.

Understand, if there are alternatives to what we're attempting to do then the Opposition should say it. They should say how they would do it. They have done budgets before; they are not like the NDP in the Province who have never been in government, they are not like other parties who have never been in government, they have been there so they know what it is like. I mean, they knew what it was like in '87 when they were saying that it was just about all over and John Collins, the former Minister of Finance, was saying: you know, if we do not get $45 million from the federal government, we will have to shut down everything we have. That was back then, when revenues were up but you know, the problem was the spending was up and what do we have to do now?

Our revenues are down because of a world-wide recession, national recession and here we are, we have all of the operations that were expanded, we have to try and keep them alive and it is a tough job. That is not easy and I think that the Opposition members understand that and if they were in our position, they would be in the same boat, Mr. Speaker, and they would be trying to figure it out and trying to deal with it. Now the other thing is, what I say to the members of the Opposition, is that they are in the same boat, Mr. Speaker, because we are all in the same boat in this Province and we had better figure it out and we had better work together to figure it out and we are going to do that.

Now whether or not they will is another question and I think though that the measures that are outlined today have been very good. I think that considering the leverage that we have, considering the times that we are in, that the measures brought in have been very positive and I think will help stimulate some economics, stimulate some business but will also send the message that we are trying to deal with this with compassion, deal with the problem and bring about a recovery in this Province as fast as we can.

Now if you look across Canada, Mr. Speaker, we have dealt with the recession probably as good or better than any province in Canada and that is a fact. That is a fact that is recognized by most of the business agencies out there who study this, the economists and so on, but our problem is, that because the other major provinces have not had good years recently, that their revenues have been down, therefore their revenues are down and our revenues are down because of the transfer situation. Our transfers, because other economies have not done as well or tried to deal with this recession, they haven't, and so I think we have a hope that the federal government has its strategy worked out and that it is going to be okay and that we see some action in the future.

It has been a very difficult process for government in dealing with these economic times, I have to tell you, it has been very difficult -

AN HON. MEMBER: And you commend government all (inaudible).

MR. K. AYLWARD: I do. I very much so commend the government for what it has done and as you know, government is now looking at the whole range of measures to deal with - we are looking at government in education, we are looking at some changes there with the Minister of Education -

AN HON. MEMBER: (Inaudible).

MR. K. AYLWARD: Well, that is what we hope, we hope. That is exactly what we are saying today, let us work together, let us work together. Yes, you may criticize us but let us work together because we need you in this Province, and I am sure that the educational changes that will come with consultation that you know - I had a meeting with the Minister of Education the other day with my school board officials, they were delighted with the openness and the consultative process that the minister has ongoing. They could not believe it; they said the government is so open-minded about dealing, which changes education (inaudible).

MR. SPEAKER: Order, please!

The hon. member's time is up.

MR. K. AYLWARD: Thank you, Mr. Speaker.

MR. SPEAKER: The hon. the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Now, Mr. Speaker, I am pleased to have an opportunity to say a few words in response to this financial statement presented by the Minister of Finance today. By agreement we only have twenty minutes each to speak in the debate, so we will only have an opportunity to touch on some of the issues on the periphery. We are not going to be able today to get into the details, but I assure members opposite that as we continue to probe and get into what is in this statement and look for the details behind the scenes, the things that were not said in this statement, I assure members opposite that we will be putting forth in the Legislature, hard-hitting questions to ministers in the hope that for once they might be able to provide some answers. We will have to wait and see on that.

Now, Mr. Speaker, let me begin right at the outset by commending the government on the positive things they did -

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: - by commending the government on the positive things that they introduced in this financial statement, small as they may have been, I want to commend them. The only thing I say to them is that we have been advising them to do that for the last two-and-a-half years at least. Mr. Speaker, every speech that I have made over the last seven months to Chambers of Commerce, Rotary Clubs around this Province and they will know, by listening to me, I have called on this government to reduce their corporate income taxes, to reduce their small business taxes and to eliminate the payroll tax. And here today the government has reduced the corporate income tax from 17 to 16 per cent, which is what it was when they took over the government mind you, and we should not forget that. Finally they have done it, after three and a half years of badgering by us and other people. They have reduced the small business tax from 10 to 5 per cent and I think that is excellent. I have to admit that is excellent. We are now able to compete with Nova Scotia. I do not know what the reduction in the manufacturing and processing tax to 7.5 percent will do because we do not have a lot of it unfortunately in the Province today.

I want to begin by commending the government publicly for taking those initiatives. I think, and I hope, those kind of initiatives will help our economy somewhat. I really believe that. I certainly hope that it will. Unfortunately you have to go on and point out the negatives that will somehow offset those positive initiatives and I am referring in particular, of course, to some of the other initiatives in terms of taxation. I will be interested to hear the Member for Humber West speak in this debate. He has publicly called on the government, as we have from time to time, to reduce taxes, reduce sales tax, reduce personal income tax, and so on and so on. I am really looking forward to his statements and his comments in this debate presumably on Monday. I agree with some of the things he has had to say in the past. I guess I should better put it the other way, he is finally coming around to the idea of agreeing with me.

Now, Mr. Speaker, we have seen all this before by the Liberals. We have seen it all before by this government. It is not what has been said in this statement but it is what has not been said in this statement. I would put out a word of caution to the public and to the people of this Province that they should not be too hasty to assess this statement in the humongous, positive way that the Member for Eagle River tied to convince us to do about twenty-five minutes ago. I assure the people of this Province that there are things that were not in that statement that are going to come out in the flow over the next number of weeks. We will bring them to the attention of the public and I will touch on some of them if I may.

I think the entire approach has been stage managed right back to last March. I sincerely believe that. I regret having to make that allegation against the government but I sincerely believe it. I think it began last March. You will remember, Mr. Speaker, last March when the former Minister of Finance stood in his place to present his Budget and the debate ensued, you will remember that the finance critic and others on this side of the House rose to our feet, time after time, and said to the then Minister of Finance: your projections are out of whack. We said that, Mr. Speaker. We said that your deficit is going to be in excess of $100 million. It is on the record. We said that as an opposition.

To the Minister of Finance we said, why did you remove $12 million from your job creation initiatives? Oh, because - whatever the answer was, we had to do it. Well, all that is going to do is increase your social assistance cost. No, no, you do not know what you are talking about, pooh-poohing our suggestions and our comments. The reality is that it is on the record. We projected, the poor little Opposition with no finance officials to give us all kinds of advice and so on, we projected the deficit to be in excess of $100 million. Now, why could not the government, why could not the members opposite project it? I wonder why? I do not suppose, Mr. Speaker, there would be any kind of deliberate strategy. Ah, they would not do that. They would not say: let us keep the deficit as low as we can regardless of what. We will fix it again in October. If anybody has any experience in coming back six months later in October to fix the deficit it is the government opposite. They have done it now three years in a row. Remember they are very experienced at it. The former Minister of Finance in 1990 told us he was going to have a $10 million surplus and six months later: oh, oh, whoops, we made some slight miscalculations in our projections. It is now going to be a $120 million deficit, round figures. In 1991 what happened? They were projecting a $53 million deficit, I think it was, but six months later or thereabouts what happens? Whoops, we made some slight errors in our projections and it is now going to be $90-odd million and this year in 1992 the deficit projection is $29 million, six or seven

months later we have -

AN HON. MEMBER: Whoops!

MR. SIMMS: - we have whoops! - but it is coming from the new Minister of Finance who had to take the heat from the inability of the former Minister of Finance, but more importantly the inability of the government opposite, at the lack of capability to properly manage the finances of this Province. That is what it all boils down to, Mr. Speaker - to properly manage the finances of this Province.

Is it any wonder that people out there are crying out, and have been for the last several weeks, that this government does not have the capability to manage its resources? We hear it every day. We have heard it day in and day out. Is it any wonder that people have been upset and excited because of the possibility of wage rollbacks? This is the crowd that told the union leaders to look for wage rollbacks three or four weeks ago. Why would they not be worried and concerned about what might happen?

So the fear factor was planted three or four weeks ago in the hopes that finally today when the Minister of Finance got up and made his statement, the news headlines would say, 'Province breathes sigh of relief' or something. That is what they are looking for and that is what this whole charade has been about - lots of deception.

The Minister of Finance gets up and gives us a lecture. 'Us' meaning us over here, no doubt, because the Premier has been pointing at me about this issue for months and months and months, but I presume he is talking about their own colleagues, like the Member for Humber West, accusing us, or pointing the finger at us, because we are the ones advocating, go out and borrow, borrow, borrow like drunken sailors. That is the kind of picture they are trying to paint. Well that is totally misleading too, Mr. Speaker, but in keeping characteristically with what this government does from time to time. What happened, of course? Three paragraphs later the Minister of Finance announced he is going to increase his borrowing - we think we can increase our borrowing.

Well that is precisely what we have been saying all along. We have been suggesting there is room for borrowing, and now the Minister of Finance confirms it. The only problem is, he now did the borrowing six or seven months later, I say to the government, and to the Cabinet ministers in particular. Why did you not increase the borrowing back in March, like we advocated, to the level that you are now going to have to do it? Why did you not take the expenditure reduction measures that you are now trying to get in four months, and spread it out over a twelve month period so that your agencies and hospital boards and municipal councils and the federation members would have a chance to perhaps more properly plan and prepare?

Now what is happening is that you are going to ask them for a 3 per cent cut in their operating grants; they have to find it in three months, when most of them have already spent 70 or 75 per cent of their budget. So it is poor management. It is poor planning, and that is the whole point of the comments that I am trying to make here today.

Mr. Speaker, we also know from past experience in dealing with this government that deception is not a new word for them. What has suddenly become a surprising new word for them is the word 'consultation'. They are using the word 'consultation' throughout their statement. Now, all of a sudden, they are going to consult. Now, all of a sudden, they are going to remove the restrictions from Bill 17. What an admission of a major mistake! They only brought in Bill 17 in the last year. Now they are saying: Oh, we have to change it and correct it.

That is what we were saying months and months and months ago. Unfortunately, this government would not listen to us and to the union leaders and other people in the Province who said that you should have done it then. You should have brought in the tax benefits for small business. You should have done that back in March at a time when we were deep into the recession, when it was required; but the biggest kerfuffle of all here today will be caused by the statement of the Minister of Finance that there is no wage rollback, and the members opposite pounded their desks and applauded and all the rest of it.

Again it is misleading, Mr. Speaker, and I will tell you why. What they have done is that they have increased the personal income tax, not only of the public servants and employees of this Province, but of every working person in this Province, by a huge amount - an increase now, on January 1st., by 4.5 percentage points.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: No, it is now 64.5 percentage points. It will be 66 per cent on January 1st., and it will be 69 per cent now as a result of the statement here. So it is a 4.5 per cent increase in the personal income tax rate that will come -

AN HON. MEMBER: (Inaudible)

MR. SIMMS: I beg your pardon?

AN HON. MEMBER: (Inaudible) being collected at (inaudible).

MR. SIMMS: 64.5 per cent.

AN HON. MEMBER: What rate is it being collected at today?

MR. SIMMS: 64.5 per cent, it is 66 now today, is it?

AN HON. MEMBER: Sixty-seven.

MR. SIMMS: Sixty-seven.

AN HON. MEMBER: Sixty-seven.

MR. SIMMS: I do not believe that is accurate.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Well even if it isn't - in other words the personal income tax rate was 60 per cent when you took office and you have already increased it to 67 per cent, is that what he is telling us?

AN HON. MEMBER: Yes, exactly.

MR. SIMMS: Well, that would mean you are only going to increase it by two percentage points on the 1st of January. Well he already announced in his statement that it is going to be increased by three percentage points -

AN HON. MEMBER: (Inaudible), only for half-a-year (inaudible).

MR. SIMMS: You see, Mr. Speaker, here is the deceit again; here is the deceit again and it is all because of the introduction of personal income tax rates during the middle of the year and all the rest of those things, but the reality is that the personal income tax rate is going to increase to 69 per cent, it is an increase of four-and-a-half percentage points, in fact, since 1989 when this government came to power, the income tax, personal income tax increase on the people of this Province will go from 60 per cent when you began to 69 per cent, and that represents a 15 per cent increase in personal income tax on the people of this Province, on the working people of this Province and that is an unprecedented increase in personal income tax. Members opposite surely must know that and to suggest there is no wage rollback, Mr. Speaker, I say to you: this is, Mr. Speaker - do you know what this is? Mr. Speaker, do you know what this is, to suggest this is not a wage rollback? This is the mother of all wage rollbacks, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: That is what this is, because, Mr. Speaker -

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Order, please!

I recognized the Leader of the Opposition.

MR. SIMMS: Thank you, Mr. Speaker.

Now members opposite obviously find this pretty humourous and pretty funny. Well, I say to them: there is nobody in this Province, not one working person in this Province who finds it nearly as funny as the members opposite do, and they won't accept the kind of laughter and humour that you are throwing out here today, because a lot of people are not getting $10,000 a month, Mr. Speaker, in income, not many people. A lot of people are not getting $10,000 a year and the Minister of Employment and Labour Relations nods his head, because I think he is sincere and I think he is serious and worried about the situation; there are many people out there not making $10,000 a year. This is not a humourous matter, this is not funny, this is serious, and members opposite can use as much deceit as they wish, they can mislead if they wish -

AN HON. MEMBER: (Inaudible).

MR. SIMMS: Mr. Speaker, the minister opposite will have a chance to speak in the debate and I hope he does. I look forward to what he has to say, but while I have the floor, I would appreciate the opportunity, since the agreement is only to have twenty minutes, normally I would get an hour, so the hon. member should be thankful I only have twenty minutes and I am sure he is.

AN HON. MEMBER: I am very grateful (inaudible).

MR. SIMMS: Yes. Anyway, Mr. Speaker, it is very difficult to try to get your points across when you are continuously interrupted by the Minister of Justice and the Minister of Employment and Labour Relations and others over there on the front benches. That is one of the problems, Mr. Speaker, that is the way they treated our advice in the past every time there was a Budget presented, they would not listen; they would not listen. Now, suddenly, three-and-a-half years later, but more importantly, perhaps three-and-a-half months before a general election, all of a sudden, Mr. Speaker, they found these brand new words: consultation, consultation a brand new word. Tax breaks for businesses, brand new thinking; how come? How come suddenly, the sudden change in philosophy? That is what I would like to know and I am sure the people of the Province are going to want to know it. I wonder why all of a sudden the Liberals opposite are taking the advice of the Conservatives who have been hammering away at them for months. I wonder why, Mr. Speaker?

Conservatives have asked for tax breaks for the business community so that they can go out and create some jobs, and they would say: no, no, no you cannot do that. It was only a day or so in the Legislature that the finance critic asked the Minister of Finance, would he consider these things and the Premier stood up and said: Ah, we would love to reduce taxes for everybody, but we cannot do it, we cannot do it

That was only days ago. Now, all of a sudden - I wonder why, Mr. Speaker, I wonder why? I don't suppose it would have anything to do with a deliberate strategy? I suppose it would be irresponsible of me to suggest that. Members opposite would not believe that. They would never, ever do that - forgetting, of course, that there is an election down the road in a few months time. Now I wonder if it has anything to do with that?

I say to members opposite, they can try to fool the people as much as they want, but I can tell them, from my travelling around this Province over the last several months, they are not going to get away with it, and that their days are numbered - as confident and as cocky as they feel over there now. They remind me, I must confess, of our own government after we had been sitting there for seventeen years, and they have only been there for four years, and they are acting the same way. They are pretty cocky. They are pretty confident.

The Premier feels that he is infallible. Well the people will choose in due course, and the people will decide whether this group over here is capable of governing the Province. They will decide if they are capable of managing the economy, and if they have done a good job. All you have to do is ask a simple question out there of the people of this Province today: Are you better off now than you were four years ago? - the age old question. That is the only question you have to ask people out there.

When I was in St. Mary's - The Capes and met with part of the 1,600 people who voted in the nominating process, and when I was in Placentia the other night and the 700 people who came out to a nominating meeting, I can tell you this - and when I attended a reception hosted by the Royal Newfoundland Constabulary last night, with 500 people in attendance - the Minister of Municipal Affairs was there; he knows what I am talking about - I can tell you, there is an anger brewing around this Province like you have never witnessed before. People are fed up with the actions of the members opposite. They know that they are grossly incompetent, and they have totally mismanaged the economy. All you have to do is look around you. Travel around the Province. Go around the Province and ask the people what their situations are.

While members over there interject; while members over there joke and laugh and make a big fuss about this, a big joke about this, unfortunately there are hundreds and thousands of people throughout this Province today who are suffering - who do not know where their next meal is going to come from.

While members opposite may think that's an exaggeration the Minister of Social Services can confirm for them, if he so desires, that it is an apt description of a lot of the problems that we are facing around this Province.

I only wish the government had been listening several months ago, a couple of years ago. I think they should have taken some of these approaches then. But the worst thing you can do is to increase your taxes, because, Mr. Speaker, that is not going to solve the deficit problem, by increasing your taxes. The minister himself told us on the 28th or 12th, whenever it was, that the deficit is up. It's because of the reduction in - not because of the increase in expenditures, but because of the reduction in the Province's income from provincial revenue sources. Income tax, and what was the other one?... Income tax and sales tax are down, corporate tax, and all the rest of it.

So the problem is a provincial revenue source problem. That's one of the big problems. Transfers are down by $32 million net, the provincial source revenues up by $64 million or $65 million. So increasing your taxes, taking more money out of the economy, is not going to solve the deficit problem. Because it isn't a spending deficit.

AN HON. MEMBER: (Inaudible).

MR. SIMMS: I'll tell the member, and I've told him lots of times. We've told him several times here in this House and it's only now that they've listened to some of it. We've told them how to do it, Mr. Speaker.

SOME HON. MEMBERS: (Inaudible).

MR. SIMMS: I'll spell it out in due course. You needn't worry. I say to the Minister of Employment, he should be more interested in getting back to his district. He should be more interested in his Liberal executive out there being able to put together a fund-raising dinner for him rather than having to cancel it because they couldn't sell the tickets and because people brought their tickets back. That's what he should be more interested in.

SOME HON. MEMBERS: Hear, hear!

MR. SIMMS: Anyway, Mr. Speaker, as much as I would like to go on -

AN HON. MEMBER: (Inaudible)!

MR. SIMMS: Mr. Speaker, as much as I would like to go on I realise my time is up. I know other members wish to participate in the debate. But I can tell the House that we will be back in days ahead, in the weeks ahead, and we'll be raising questions about this Budget, and we'll be exposing it for the fraud that it really is. Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Member for Fortune - Hermitage.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: Thank you, Mr. Speaker. The first thing that I would like to say in the debate - and I can't quote verbatim, and I don't have Hansard - but I'm referring to a remark made by the finance critic from Mount Pearl, when he spoke about members not seen in their districts.

So therefore I am not sure if he was casting aspersions that we were fabricating some way of getting our pay by not going to the districts. Now, that came through to me very, very clearly. I would like to suggest to him and to anybody else here that I spend my time in my district. In fact I put 90,000 kilometres on my car in one year. I visit every town council and whatever their concerns are I try to address them to the best of my ability. Besides that I have never taken a plane from here to Gander during the time I have been elected and neither have I ever rented a car. I have driven from here to my district and back and forth to the Burin Peninsula. It is quite a district to represent. I honestly want to say to the House of Assembly that I am not one bit ashamed of the travel I have done or the dollars I have spent. To the best of my knowledge I have really been up-front with it. I know that I have. It is all on the record so I have nothing to say in that particular regard.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: I cannot say what anybody else has done but I have been to my district and I am honest about that.

SOME HON. MEMBERS: You are trying to make up for crossing the House now.

MR. LANGDON: No, I am not. The finance critic for Mount Pearl said, first of all in his remarks, that we could not borrow, we could not cut programs, we could not raise taxes, so what is the solution? It is to maintain the status quo. Now, anybody who has looked at the world economy should realize that in the Western World there is a new economic order. There are no two ways about that and I think all of us are aware of it. Revenues that were there five years ago are not there now. There is no way that we can maintain, not only this government but an NDP government or a Progressive Conservative government, cannot maintain the public level of spending that was done in the last decade. It cannot be done. The monies are not there to do it so there has to be some fiscal management, some fiscal restraint, and I think that makes a lot of sense.

Now, let me first of all go back and talk about what happened. I went to the meeting in Harbour Breton last Saturday night and met some teachers there. I got up in front of the teachers - it can be verified by anybody who wants to - and my message to them was basically this: Anybody can make mistakes. Things have probably been done in a way that we were probably all not pleased with in the past, but this is a serious problem that is now facing government and government is willing to listen to people, willing to listen to the public service, willing to listen to teachers, willing to listen to nurses; there was some scepticism there but I said look, wait until the particular financial statement is in place and then tell me if what I have been saying to you is not true. And today I have been vindicated because there was -

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: There has been a consultative approach. Now obviously, there is no doubt about it, everybody and especially I guess the Opposition would have been hoping probably that there would have been contract stripping. We would have probably been hauled over the coals for it happening but it did not happen because it did not happen and because it has not happened the thrust of their venom, the thrust of their argument has to be related in another way. They are just stumbling around from one particular aspect to the other. I mean you do not have to be a genius to see that, now I probably did but I have no regrets with what I have done. I did what I did and I am not the first one to have done it.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: Your previous leader did that and I am not the only one. The federal member in Ottawa did that, I am not the first to do it but I did it on principle and the thing about it -

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: - the people in my - and I can tell you now, the people in my district will support me and continue to support me and I will tell you one thing they have already told the Leader of the Opposition to stop phoning because they cannot find somebody to run.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: Do not kid yourself, I know what I have. I have represented the people in my district well. I did what I could and they have recognized that and I have talked to some of the teachers from my district this morning and they said: your government has to be commended on the job that it did.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: In the meetings that I had with the nurses, in the meetings that I had with the teachers, they said take the message back to government: do not penalize us at the expense of everybody else, and I want to say that the government has listened and that they are sharing the burden. Everybody across the Province will have to take up their responsibility. This is what it is about, being fair and not pick on the public servants. I talked to the head of the union, the NTA and they said you have done a commendable job, you have to be congratulated on what you did.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: Now, after having said that, I am aware that the picture is not all rosy, I believe that in the future there has to be some serious decisions, some serious consultation. I have to say to the people of this Province that the financial times that we are experiencing are difficult, but I believe that if the will is there - the collective will - among everybody to do it, then obviously it can be done, and I believe that this particular government will do that.

Mr. Speaker, we are also talking about the financial situation that we are in in the deficit. I look at the particular difficulty that is facing not only this government but other governments. For me personally, I do not think I have to worry. I am at the age where I believe that the financial situation will probably take care of me; but I am not so naive as to believe that the young people - my children, and their children who will come after that - there is no way that they can really afford - we cannot afford to go out there and borrow and really leave all the debt for them to carry, because I do not believe that they can carry it.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: I do not believe that they can.

When I look at this Province this past year, there were 7,100 children born in this Province - 7,100. If you look at the financial burden that we have in this Province, and then realize that the particular birth rate being as it is, I am telling you, it is a very, very serious problem that we have, and it is a scary problem. We have to manage our resources, and we have to manage our debt. We just have to, I believe, have a look at the situation where we can have a new beginning co-operatively, because I believe honestly that we cannot continue to live in the way that we did in the eighties. We just cannot do that, and I believe that the people out there are beginning to understand and beginning to realize that. We have to.

The people in my district - I have said to them over and over again: I will not come back and tell you something that I do not believe to be true. I want to be honest with you. And they have been appreciative of that. The situation in Harbour Breton, or in Gaultois, or in Belleoram, or in whatever other community that I have had, I have not gone back and promised them roses because I cannot deliver.

I want to tell you one thing, though. This government, over the last three-and-a-half years, has recognized the needs of the people in that particular part of the Province, and for years it was neglected.

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: I want to say also that I am really glad that my district, being what it is, is contributing in a meaningful way. For a long, long time we were the poor sisters of the Province; but I am glad to say, with the amount of fish that is there, that we are contributing.

The fish plant in Gaultois, over the last couple of weeks, has had close to 2 million pounds of fish. In the Hermitage area the inshore fishery is not great, but because of the price of it we have 169 people working there in two terms. I know Harbour Breton is going to experience some difficulty, and they have worked at that.

The thing is, I realize the plant in Belleoram is not opened, we are working on it and working with the Mayor and hoping that we can find some solution to it, and I believe that we will and by doing that, Mr. Speaker -

SOME HON. MEMBERS: Hear, hear!

MR. LANGDON: - I recognize there are two minutes before the hour and I want to adjourn the debate.

MR. SPEAKER: The hon. the Government House Leader.

MR. ROBERTS: Mr. Speaker, having heard that most excellent speech or the first parts of the most excellent speech by the Member for Fortune - Hermitage, there is one other item of business.

By consent of all concerned, I would ask leave to put on the Order Paper, certain Notices of Motion which grow out of the statement made by my colleague, the Minister of Finance, this morning. On behalf of the Minister of Finance, I give notice - I assume I have the leave, I understand.

MR. SPEAKER: The hon. member has leave.

MR. ROBERTS: Mr. Speaker, I give notice on behalf of the Minister of Finance, that I will on tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Health And Post-Secondary Education Tax Act".

On behalf of the President of Treasury Board, Mr. Speaker, I give notice that I will on tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Public Sector Restraint Act, 1992," (Bill 17)

SOME HON. MEMBERS: Hear, hear!

MR. ROBERTS: Mr. Speaker, I give notice on behalf of the Minister of Finance that I will on tomorrow move that the House resolve itself into a Committee of the Whole to consider certain resolutions relating to the imposition of a tax on tobacco.

I give notice that I will on tomorrow move that the House resolve itself into a Committee of the Whole to consider certain resolutions relating to the imposition of a tax on gasoline.

I give notice that I will on tomorrow move that the House resolve itself into a Committee of the Whole to consider certain resolutions relating to the Income Tax Act.

And finally, Mr. Speaker -

MR. SPEAKER: Order, please!

Do hon. members agree to call it twelve?

SOME HON. MEMBERS: Yes.

MR. SPEAKER: Stop the clock at twelve.

MR. ROBERTS: Finally, Mr. Speaker, on behalf of myself, in my own right, I give notice that I will on tomorrow ask leave to introduce a bill entitled, "An Act To Amend The Electoral Boundaries Act". We will see what the Opposition says.

Mr. Speaker, in moving the adjournment, I shall remind hon. members that we will on Monday, carry on with this debate. We will have a regular routine Orders of the Day, hopefully with not too many petitions because if we have petitions on Monday it will simply cut into the time available for debate. We will have a Question Period and the regular routine Orders of the Day and I hope there will be no petitions on Monday, fine with me, and then we will carry on. My friend for Fortune - Hermitage will give us the second half of the third lesson and then there will be twenty-minute speeches until the House rises at five of the clock.

I move that the House do now adjourn until Monday at 2:00 in the afternoon.

On motion, the House at its rising adjourned until Monday, at 2:00 p.m.