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Budget alternatives for consideration

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In view of the pain and punishment inflicted on this province by the Bennett/Ball budget, and in view of the ever-growing discontent, it becomes the responsibility of each and every one of us to provide an alternative or alternatives. I would like to name mine.

1. The founding of a provincial bank owned by the government. I’d like to remind people that all banks in Newfoundland are privately owned except the two Credit Unions. The advantage of a provincial bank is that it would give the government access to billions of dollars to which at the moment it can’t get its hands on. Those billions of dollars exist in the form of savings in private banks. As of 2015, those savings totalled approximately $8.5 billion.

If the government bank attracted only one quarter of those savings, it would have more than enough to balance its current budget. And if people moved only half of their savings to the new bank, we’d have billons for job creation.

The problem with this option is that a provincial bank is illegal under the present federal system. So, what would the federal government do if we established a provincial bank? Would they take steps to prevent it and therefore line up with the Bennett/Ball budget and punish the people of Newfoundland with its political consequences?

Perhaps they’d have second thoughts and opt for alternatives, such as providing a few billions to balance our budget and undo the tax increases proposed by the present administration. In either case it would take a little more courage than we usually see from our leaders.

2. How often have you seen millions of dollars raised in a matter of days for some charitable, emergency cause? It is usually done by some advocacy organization setting up an account in one of the banks and asking people to donate. Why could we not use a variation of that course of action? As there are approximately 420,000 people in this province over the age of 18, it takes only a little math to discover that around $4,000 per person would realize approximately $2 billion. Those donations would be done in the form of a temporary loan.

I recommend that the provincial government open a Salvation Account in the Credit Unions and ask people to move an average of $4,000 of their savings to this account. The savings would be as safe as in any private bank and could be withdrawn again soon as the budget is balanced and the economy recovers. Even if the government offered no interest on that new account, the people would still benefit more from this course of action through the retraction of the new impositions imposed by the budget. Of course, lots of people in that age category would not have $4,000 to move, and many would have more. But the purpose of using those calculations is to show there are realistic alternatives available in the form of money to fulfil our budgetary needs.

3. If some of our financial experts think that the above would not work, or would be too difficult, then I recommend a variation of No. 2 as follows: we can access the same savings by a different route: a provincial bond offering. Those could be offered with varying maturities, two-year, five-year, 10-year etc. With obvious federal backing they would possess supreme security and instil in the savings deposit holders a feeling of the utmost confidence.

Then there are the benefits. It would be easy to offer incentives to the purchasers in the way of returns given the small return they now earn in the banks by way of interest. Then of course there are the other obvious benefits, primarily the withdrawal of the Bennett/Ball budget, retraction of all the tax increases, budget cuts and job losses announced in the budget.

My basic objective has been to demonstrate two things. First, to show that there is lots of money available. Second, to show that our basic challenge is to discover how to access those moneys without punishing those who can afford it the least.

I therefore recommend these ideas for the consideration of the public, but primarily for the consideration of Premier Dwight Ball and Finance Minister Cathy Bennett.

John Carrick Greene, St. John’s

 

 

1. The founding of a provincial bank owned by the government. I’d like to remind people that all banks in Newfoundland are privately owned except the two Credit Unions. The advantage of a provincial bank is that it would give the government access to billions of dollars to which at the moment it can’t get its hands on. Those billions of dollars exist in the form of savings in private banks. As of 2015, those savings totalled approximately $8.5 billion.

If the government bank attracted only one quarter of those savings, it would have more than enough to balance its current budget. And if people moved only half of their savings to the new bank, we’d have billons for job creation.

The problem with this option is that a provincial bank is illegal under the present federal system. So, what would the federal government do if we established a provincial bank? Would they take steps to prevent it and therefore line up with the Bennett/Ball budget and punish the people of Newfoundland with its political consequences?

Perhaps they’d have second thoughts and opt for alternatives, such as providing a few billions to balance our budget and undo the tax increases proposed by the present administration. In either case it would take a little more courage than we usually see from our leaders.

2. How often have you seen millions of dollars raised in a matter of days for some charitable, emergency cause? It is usually done by some advocacy organization setting up an account in one of the banks and asking people to donate. Why could we not use a variation of that course of action? As there are approximately 420,000 people in this province over the age of 18, it takes only a little math to discover that around $4,000 per person would realize approximately $2 billion. Those donations would be done in the form of a temporary loan.

I recommend that the provincial government open a Salvation Account in the Credit Unions and ask people to move an average of $4,000 of their savings to this account. The savings would be as safe as in any private bank and could be withdrawn again soon as the budget is balanced and the economy recovers. Even if the government offered no interest on that new account, the people would still benefit more from this course of action through the retraction of the new impositions imposed by the budget. Of course, lots of people in that age category would not have $4,000 to move, and many would have more. But the purpose of using those calculations is to show there are realistic alternatives available in the form of money to fulfil our budgetary needs.

3. If some of our financial experts think that the above would not work, or would be too difficult, then I recommend a variation of No. 2 as follows: we can access the same savings by a different route: a provincial bond offering. Those could be offered with varying maturities, two-year, five-year, 10-year etc. With obvious federal backing they would possess supreme security and instil in the savings deposit holders a feeling of the utmost confidence.

Then there are the benefits. It would be easy to offer incentives to the purchasers in the way of returns given the small return they now earn in the banks by way of interest. Then of course there are the other obvious benefits, primarily the withdrawal of the Bennett/Ball budget, retraction of all the tax increases, budget cuts and job losses announced in the budget.

My basic objective has been to demonstrate two things. First, to show that there is lots of money available. Second, to show that our basic challenge is to discover how to access those moneys without punishing those who can afford it the least.

I therefore recommend these ideas for the consideration of the public, but primarily for the consideration of Premier Dwight Ball and Finance Minister Cathy Bennett.

John Carrick Greene, St. John’s

 

 

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