Punishing austerity way of the future for Newfoundland and Labrador?

Angela Carter, People's Recover co-facilitator

“NOBODY CUTS OFF THEIR FEET because they spent too much on socks. But that’s what that crazy Dame from England wants us to do,” says Gus Parsons, a handyman and People's Recovery supporter who lives in Bay Roberts, Newfoundland and Labrador. “She wants us to cut and cut and cut. She says there is no alternative. She’s wrong.”

Raymond’s reaction catches the spirit of the strong public opposition to The Big Reset, a May 6 report from a group of “economic experts” hand-picked by Newfoundland and Labrador premier Andrew Fleury and headed by Moya Greene, that recommends the government resort to a punishing austerity agenda to rescue the province’s floundering economy. The Greene report recommendations include:

  • deep job cuts in the public service

  • a public service wage freeze and pension restructuring

  • a 25% cut to public healthcare

  • a restructuring of the education system that would include a 30% cut to the operating grants of postsecondary institutions

  • privatizing key public assests like NL Hydro

  • the sale of the NL Liquor Corporation (NLC) and provincial shares in oil and gas projects

  • Public reaction, beyond the big business sector, was instant and uniformly negative.

Alienating workers

Alyse Stuart, a community organizer with the Common Front NL Coalition, said she was sick to her stomach about the report and the groups that are being targeted, especially unions.

“Certainly there are some ways that we are going to be able to work together, but alienating workers is not the way to do that,” she said.

People’s Recovery, a citizens group working for a just, sustainable and community-based economic recovery for Newfoundland and Labrador strongly rejects the basic premise of the Greene report. “We don’t need to slash. There are other solutions to the deficit,” reads the People’s Recovery report.

Another obvious alternative to radical cutting is to collect more in revenue, says People’s Recovery co-facilitator Jessica McCormick.

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.

McCormick says the Greene report is haunted by the ghost of Thatcherism: “...essentially, 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.”

“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.”

Concrete ways to increase revenues

The People’s Recovery report offers precise and concrete ideas on how to bolster the province’s revenue stream, among them:

  • an income tax increase by two per cent in the top two brackets

  • a wealth tax

  • increasing the corporate income tax rate for large corporations by two per cent

  • extending the six per cent capital tax to all large corporations

  • working with other governments to eliminate the use of tax havens

  • taxing capital gains the same as wages

  • People’s Recovery also calls for increasing the minimum wage to $15 .

‘A little insulting’

“Everyone understands we have fiscal challenges; that’s not the issue. I think the assumption that there’s no other way of responding to them was a little insulting to the people of Newfoundland and Labrador,” said Mary Shortall, president of the Newfoundland and Labrador Federation of Labour

The Greene report recommends a 30% reduction in the operating grants of Memorial University and the College of the North Atlantic over the next six years. This will spell disaster to the quality and affordability of education in NL, says Katherine McLaughlin, chairperson of the Canadian Federation of Students NL. “

It’s affordable tuitions that attract students to MUN, says McLaughlin. “We don’t come here for the sunny weather and beaches. Implementing these recommendations would be a big, big mistake.”

“The Greene report ... is a blueprint for the destruction of rural Newfoundland and Labrador,” says Keith Sullivan, president of Food Fish and Allied Workers-Unifor. “The section on the fishery reads like a press release from the Association of Seafood Producers.”

‘Old fashioned economics’

“The ‘old fashioned economics’ in this report are textbook austerity measures that have proven to fail time and time again,” said Unifor Regional Director Linda MacNeil. “Moya Greene missed the opportunity to recommend bold action to create jobs, boost the economy and to build back better; instead she chose to cut healthcare to the bone, hold a fire sale on government assets, attack pensions, and freeze worker’s wages.

Newfoundland Association of Public Employees president Jerry Earle called the Greene Report a “punch in the gut” to public sector employees, including health care workers and other employees who are working through a pandemic on the frontlines.

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