Independent economic report pushes back against Greene report, offers alternative vision of N.L.'s future

A neweconomic report,released as an alternative to The Big Reset, is offering up a different vision of how to knock down Newfoundland and Labrador's debt by rejectingcuts and austerity measures, and focusing instead on taxes and other initiatives.

"We don't need to slash. There are other solutions to the deficit," reads the People's Recovery report, released Tuesday.

The 50-pagereport was created by ateam independent fromPremier Andrew Furey'seconomic recovery team, chaired by Moya Greene,which releasedThe Big ResetonMay 6 with recommendations for deepcuts and other measures tohelp the provinceclimb out from under its current fiscal crisis.

People's Recovery co-facilitatorJessica McCormick told CBC News her group wants to talk about paying down the province's debt and deficit in a way that doesn't harm people and communities who rely on social programs and public services.

"When we enact austerity measures, which is a lot of what's found in the Greene report, we know that the people who are harmed most by those measures are the folks who rely on social programs," McCormick said.

"So if we extend an austerity agenda in Newfoundland and Labrador, we'll likely be driving more people towardthe social programs that our taxation system needs to pay for, and that's why we need to balance both of those approaches in economic recovery."

Pushback against 'Thatcherism'

The report says major spending cuts would have a "tremendously negative impact" on children,students, parents, patients, seniors, and workers especially women, which the report saysmakes up 71 per centof teachersand 80 per cent of health professionals inNewfoundland and Labrador.

The report continues on to say major cuts would put people out of work, while also hurtingbusinesses that providegovernmentwith goods and services.

"The concerning theme throughout the Greene report is thatkind of dated,tried, tested and proven to not work ideology of Thatcherismessentially, that we need to cut and gut and slash public services in order to address the deficit. We just don't feel that that is the way forward,"McCormick said, referencing the 1980sconservative politics of former British prime minister Margaret Thatcher.

"There are difficult choices that need to be made, but those choices and those cuts shouldn't be borne by the most vulnerable people in our society. We've proposed revenue measures that can address the structural deficit but not harm working people. "

The process to create the People's Recoveryreport started five months ago, when a group of more than 60 people including labour leaders, academics andactivists felt they weren't represented by the premier's economic recovery team.Among the report'scontributorsis union leader Mary Shortall, who left the premier's team in Januaryafter raising concerns over what she said was alack ofcollaboration and transparency.

Tax increases and ideas

The People's Recovery report does offer ideas toward bolstering the province's revenue, among them a series of tax increases.

Its recommendationsincludean HST increase of onepercentage point, an income tax increase oftwopercentage points in the top two brackets, and a wealth taxwith a lower threshold than outlinedthe Greene report.

Further, the report recommends increasing thecorporate income tax rate for large corporations by two percentage points, extending the sixper centcapital tax to all large corporations,working with other governments to eliminate tax competition and the use of tax havens, taxing capital gains the same as wages, as well as an improvement of the carbon tax and energy efficiency.

"The fact is that the government can fully address the structural deficit, and begin to pay down the debt, without deep spending cuts," the report reads.

The report also stands againstpublic-private partnerships and privatization, whereas the Greene report suggestscutting health and education and selling off the Newfoundland and Labrador Liquor Corporation.

The report said privatizing liquor stores in Alberta and other jurisdictions has led to higher consumer prices, as well as larger social impacts such as health problems.

"At the same time, government revenues tend to be lower with privatization," the report reads.

People's Recovery also dips into Newfoundland and Labrador'spoverty, food security and living wage issues, with recommendations on increasing the minimum wage to $15 andprotecting and improving public services and programs for peoplewho have already beenmarginalized by existing social and economic structures.

Including all options: Coady

Richard Alexander, executive director of Newfoundland and Labrador Employers' Council, told CBC Newsthere needs to be public spending reform, and a modernization of government to provide programs and services in a stable public sector without bankrupting the taxpayers.He saidausterity measures will be worse in the future if nothing happens.

"The longer that we wait to take action on spending reforms the bigger the hole gets and the harder it is to get out of it," he said.

In a statement to CBC News, Finance Minister Siobhan Coady said the province is undertaking "a robust consultation process" to discuss the recommendations made in the Greene report.Coady said the provincial government isconsidering all views and opinions, including those of the People's Recovery.

"We thank them for their work to date and we look forward to continuing the conversation on the future of Newfoundland and Labrador," Coady said.

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