Thread by @PeterCBC

*BREAKING* The Greene report is out and it's recommending a huge change in how government operates. Tax increases and big cuts to government. It's called "The Big Reset" #nlpoli

“The Big Reset” it focuses on four main areas:
- Reimagining government and governance
- Transition to green economy
- Focus on technology and skills development and supporting seniors
- Improving finances through tax increases and cuts

#nlpoli

When you look at the total debt and obligations it’s $47.3 billion. That means each household owes $215,000
If unchecked we will add another $7 billion in debt in the next 6 years. Moya Greene says that’s unsustainable #nlpoli

$1.5 billion dollars is paid in debt servicing (including Nalcor debt) every year, that’s money we don’t get to spend on services. It’s twice as much as we spend on k-12 education.
#nlpoli

"We can right the ship but we have to face facts." We are in an unprecedented financial challenge of our own making says Moya Greene, who lead this team.
She says this doesn't have to do with the pandemic and predates Muskrat Fall. We overpent #nlpoli

Over 15 years provincial spending went up 80%. Even when oil and gas revenue went down we didn't cut our spending #nlpoli

There should be a 20 year green economy transition strategy, lead by the premier.
Oil will be needed for 40 years but the window is closing.
Existing system to regulate the industry is to slow and cumbersome #nlpoli

Green transition is a technology problem, education should be more focused on science, technology and engineering skills. K-12 and postsecondary need to respond #nlpoli

They’re recommending a “future fund” from a share of oil and gas revenue.
Use half of oil and gas revenue to fund regular government, other half into fund
It will be used to pay down debt and transition to a green economy
Carbon tax revenue could also be used for this #nlpoli

The team is recommending eliminating Nalcor Energy
“The organizations size and complexity does not reflect the small size of the province”
Most functions merge merge into NL Hydro, oil and gas move into the provincial government. #nlpoli

Eventually the team recommends sell off NL Hydro assets, use that money to reduce hydro rates, reduce debt, pay into the future fund #nlpoli

“We are by no means advocating anything like an austerity regime” a combo of tax increases and reducing spending done gradually with mitigations for low income people #nlpoli

NL spends 24% more per person spent than the canadian average on health. $6,443 per person. Spending has gone up, health outcomes haven’t improved. Aging shouldn’t be treated as a disease, more supports for seniors to stay in their homes #nlpoli

Health authorities have 109 facilities. Their grants should be cut by almost 5% a year, for a total of a 25% reduction. This would have a huge impact on healthcare services #nlpoli

New taxes on the most wealthy proposed, including a second home tax. They’re recommending 1% increase in all personal income tax brackets. A 2% increase to corporate taxes #nlpoli

They’re recommending a 1% increase to the HST (raising it to 16%), a 1.5% increase to gasoline tax, increases to payroll (.5%), cigarette taxes (5.5 cents) #nlpoli

PERT says the province should work with the feds and look at a wealth tax for wealth above $10 million. Also increase probate fees, so when someone leaves a $1 million inheritance, $50,000 is handed over to the province #nlpoli

It’s recommending a gift tax, so if you give a relative something worth more than 10,000 you would pay some tax on it. Also a tax on luxury vehicles proposed #nlpoli

OK those are the new taxes, where is government going to cut?
Proposing 5% reduction in core government spending. Reduce operating grants to the university and college, a 30% reduction total (over 6 years) #nlpoli

Compensation for public government employees are higher than similar jobs in the private sector. Changes need to be done cooperatively with unions. Recommending moving to defined contribution pensions and a wage freeze #nlpoli

Moya Greene says balancing the budget isn't just for the sake of it, it's so we can pay our bills, so our province is a place people want to stay. She calls it "Old fashioned practical economics" #nlpoli

OK I found one way they want to make things cheaper! If you buy an electric car they’re recommending a rebate of the provincial HST amount (around 10%) #nlpoli

PERT is recommending the liquor corporation be sold off in whole or in part (maybe just the blending and bottling division for example)
#nlpoli

No cuts proposed to k-12 education but need to examine where spending is happening, reduce spending at district level, direct more resources to the classroom #nlpoli

Legal aid and NL Housing see small reductions, other government agencies would see cuts of 20%. Agencies haven’t seen the same cuts core government has says Greene
#nlpoli

We are in a “fiscal crisis”, what happens when we can no longer borrow, what if interest rates rise, what if we have to quickly and chaotically shut down services, how much debt is reasonable? Think about those says Greene #nlpoli

Greene says we can't count on the federal government to bail us out. Anything they do for us they'd have to do for every other province, we need to solve these problems ourselves #nlpoli

If you want to read the whole Premier's Economic Recovery Team report it's available online thebigresetnl.ca #nlpoli

Greene says corporate taxes are going to rise around the world so we'll remain competitive by raising corporate rates #nlpoli

The province should look at charging property tax on properties that sit outside municipalities and currently pay no tax #nlpoli

"The Churchill River is a beautiful asset" says it's green clean hydro electric. The potential is 5x greater than we need.
Recommending bundling all the Churchill river assets together.
Could be hydrogen development, rare earth element mining
#nlpoli

"We've got to ask the wealthy to contribute more, it can't just be on the income of the middle class," says Greene. that's why the focus on wealth tax and other more creative ways to raise money #nlpoli

We don't evaluate any of our programs, we just keep adding to it.
If it's not working you're only going to know if you have built in ways to measure whether it's succeeding in its goals #nlpoli

Greene says she doesn't think the big cuts will lead to lower services, she thinks in fact services can improve #nlpoli

If you're a young person staring at the huge debt, the aging population you'll want to see a strategy to green the economy, "you may think these are necessary measures to take for now"
#nlpoli

If you're being asked to pay more tax you probably won't like it, you will probably "grit your teeth and say yes ok, as long as we start cutting our expenditure cloth to where we are" #nlpoli

If every year your government doesn't seem to be bothered by a deficit then the people who work for government come to believe it's not important says Greene.
That's where she thinks the culture of ambivalence towards deficits have come from #nlpoli