Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Manitoba 34e 1ère Discours sur le Budget 8 août 1988 Clayton Manness Ministre des Finances Progressive Conservative Party of Manitoba Farmland, vast tracts of forests, abundant mineral reserves, and mighty rivers. We have Hydro, a blessing as we approach the 21st Century. Managed well, it will drive our economy, creating permanent jobs and investment. We have attractive opportunities for long-term development. I see the day when our province will again be a leader in developing technology in areas as diverse as agriculture, health and aerospace. As has been stated many times, we have enormous human resource potential, intelligent and energetic people who are eager to meet the challenges of the future. It becomes our obligation as Government to create the environment where these talents can prosper, where individuals can fulfill their dreams and provide for their own requirements. However, for all its opportunities, Manitoba still has needs which must be met and problems which must be solved. Our people are becoming increasingly aware that economic growth in recent years has relied upon an unsustainable level of public sector spending, which has left a legacy of high debt, high taxes and a growing burden of debt-service costs. This legacy threatens the public programs Manitobans want and Manitobans deserve. It also threatens the investment and job creation potential of our economy which is essential to our continued prosperity. The fiscal excesses of the past constrain efforts to stimulate growth and provide services. Scarce tax dollars used to pay interest on the province's debt to international lenders are not available to pay for health, education and other services in Manitoba. On April 26, Manitobans voted for sound management to meet these challenges and to take full advantage of our province's potential. Our goal is a competitive and diversified economy which will provide increased investments and job opportunities for our citizens, and pay for quality health, education and social programs. Today's Budget outlines this Government's plans: * to meet the challenges facing us in health care, education, and other social services; * to encourage job creation and capital investment, and to speed the recovery of agriculture; * to regain control of spiralling debt and interest costs; Hon. Clayton Manness (Minister of Finance): Mr. Speaker, as I rise to present the first Budget of our Government, it is clear that Manitoba is at a crossroads, a turning point in our history. We are facing decisions that seriously affect our future prosperity and quality of life. Manitoba is a province rich in opportunity. Our natural resources are the envy of the world: productive * to improve management and accountability of Government departments, Crown corporations and agencies; and * to make Manitoba's taxes competitive with other jurisdictions. In short, this Budget helps Manitoba regain the eminence in Canada it once enjoyed. We are now at a crossroads. Ahead lie new opportunities for all Manitobans. This Budget outlines the first steps that we propose on our journey together into the future. Manitobans can take heart from this Budget. As promised during the election, there will be no increase in personal income taxes. There will be no increase in corporate taxation. A 6.7 percent increase in spending is proposed to maintain and expand important services and meet the real needs of Manitobans. Assistance is provided to help farmers cope with the drought. The first step is taken toward the elimination of provincial school taxes on farm land. Fully two-thirds of program spending is allocated directly to priority health care, education, social assistance and community protection. More money will be invested in our essential highway system, the lifeline of rural Manitoba and our prime trading link to neighbouring provinces and states. Limited tax increases are proposed on tobacco, on leaded gas and on mining profits. Action is taken to deal with the punitive tax load facing business and industry. The payroll tax is eliminated for half the taxable employers in the province. An income tax holiday for new small business will encourage the formation and growth of new Manitoba enterprises. For individuals, the full benefits of National Tax Reform, $91 million in federal tax reduction and $52 million in Manitoba income tax reductions, will be passed on to Manitobans. The previously planned 25 percent increase in motor vehicle registration fees will be rescinded. The province's annual deficit has been reduced by more than one-third, to $196 million. A significant start has been made on the critical task of managing the affairs of Government effectively and responsibly. But, much remains to be done. An independent review of the province's books has recommended changes to the province's accounting policies in keeping with generally accepted public sector accounting principles. As a result, the recorded liabilities facing Manitoba taxpayers are adjusted to include an additional $709 million, and the recorded financial assets are reduced by $368 million-over a billion dollars in total. Deficits, regardless of their size, continue to add to the debt facing taxpayers. We must strive to meet the demands for programs and services, and pay the costs of past borrowing from current revenue. We must build for the future rather than borrow from it. Before going into the details of the Government's plans, I would like to discuss the economic context within which we must make our policy and management decisions. The international economic expansion in the 1980s has been the longest in post-war history. Many observers expect more moderate economic growth in the years ahead. Manitoba shared in the economic prosperity of the mid-1980s. However, Gross Domestic Product and investment per capita remain well below national and western Canadian levels. The gap widened last year as the province recorded virtually no growth in total capital investment, a slight downturn in private investment, and employment growth of less than 1 percent. Overall growth in real Gross Domestic Product totalled 3.1 percent compared with 4 percent in Canada. Earlier this year, forecasters predicted an increase in real GDP in Manitoba of 2.5 percent to 3 percent in 1988. However, as the impacts of the drought begin to be assessed, it appears that growth may be considerably lower, and possibly below 2 percent. This one factor points out the dominant position agriculture continues to hold in the Manitoba economy. Employment growth of under 1 percent appears probable. The unemployment rate is likely to be close to 7.5 percent. Prospects for 1989 are encouraging, assuming the national expansion remains on track, and the return of more normal conditions in agriculture. One in seven Manitoba jobs is dependent on international trade. Manitoba is a trading province and our business sector must have access to markets to expand and to create jobs. Given fair opportunity, Manitobans have the talent and the entrepreneurial ability to compete successfully throughout North America and, indeed, globally. Studies of the impact of the Canada-U.S. Free Trade Agreement indicate cumulative positive effects amounting to 2 percent to 3 percent of Canadian GDP in the first five years. Manitoba's central location in the North American trading area means our businesses are well situated to take advantage of the new opportunities under the Free Trade Agreement. And that, in turn, means more investment and more jobs for Manitobans. The multilateral trade negotiations, which are now gathering momentum, will be of major importance to Manitoba in improving international market access for agricultural products in particular. Canada's alliance with the U.S. through the Free Trade Agreement will place us in a better position to influence positively the resolution of international trade issues impacting on Manitoba. Manitoba's long-term prospects are bright. We have the resources, the industries and the people to build a stronger, more dynamic economy which will meet the competition and profit from the challenges of the 1990s. There are opportunities in energy-intensive industries and in advanced-technology production which will revitalize our manufacturing sector. A reduction in world grain stocks is setting the stage for longer-term recovery and growth in agriculture and related industries. New mineral production is coming on stream. Our Government is working with the federal Government to develop joint initiatives and new agreements to strengthen and diversify Manitoba's economy. Better management of provincial affairs and sound fiscal planning will contribute to growth, development and wealth creation. Mr. Speaker, sound fiscal planning must be based on an accurate accounting of the financial obligations facing Government. Manitobans have a right to receive a true and complete accounting of the fiscal circumstances facing the province, including an accurate valuation of debt ultimately carried by the taxpayer, and losses incurred in Crown corporations and agencies. For that reason, during the election, a full-scale independent review of the financial position of the province, including foreign borrowing, was promised. To fulfill that commitment, we have initiated a special three-phase project to improve financial reporting and accountability. Phase one, undertaken by Stevenson Kellogg Ernst and Whinney, has now been completed. The Review recommended accounting policy changes and related adjustments: to recognize losses when they occur; to record foreign currency gains and losses in the province's financial position on a more current basis; and to consolidate accounts related to general Government operations. The Review identified specific adjustments to the Financial Statements of the province required to implement these recommendations. The recommended adjustments have been made and are reflected in the updated financial position of the Government. They include: * Recognition of the province's total liabilities, including foreign exchange losses, and recognition that some financial assets are not recoverable at the value carried on the books, mean that the excess of liabilities over financial assets at March 31, 1988, was more than $1 billion higher than under the former accounting system. * The province's deficit for 1987-88 stands at $311 million. * The General Purpose Debt-financed by taxpayers-outstanding at March 31,1988, is increased $1.3 billion to reflect: - the consolidation of debt issued for general purposes, including debt through Manitoba Properties Inc.; - the inclusion of unrecoverable debt of and advances to Crown corporations and agencies; and - the valuation of debt issued in foreign currencies at the exchange rates in effect on March 31, 1988. With these adjustments, General Purpose Debt totalled $5.3 billion on March 31, 1988. The recommendations in the Independent Review for a more complete and straightforward disclosure of Government spending and net liabilities are reflected in the Preliminary Year-End Financial Statement for 1987-88, which I am tabling today, and in the province's spending plans for 1988-89. Year-over-year comparisons cited in this Budget are based on the Preliminary Actual results for 1987-88. Last year, the province's spending totalled $4.349 billion-$161 million, or 3.8 percent, above the amount budgeted. The spending total includes $75 million in extraordinary expenditure related to the Manitoba Public Insurance Corporation and Workers Compensation Board. Revenue totalled $4.038 billion-up $265 million from the amount budgeted. Equalization receipts $151 million above the Budget estimate, and personal income tax revenue $107 million over Budget, accounted for most of the increase. We believe responsible planning of the province's budgetary affairs must take the total financial situation into account. Manitoba's spiralling debt poses a direct threat to our social and economic progress. It must be brought under control in order to maintain quality social services and to build a better Manitoba. In March 1982, our General Purpose Debt was $1.4 billion. At the end of the last fiscal year, it stood at $5.3 billion. In a period of six years under the previous administration, the General Purpose Debt, which had accumulated over the first 112 years of our province's history, more than tripled. And this escalation occurred, in large part, during a period of economic growth and expansion. The inevitable result of increasing debt is, of course, escalating interest payments. In 1981-82, the net costs of servicing General Purpose Debt amounted to $114 million, or 5.2 percent, of total revenue. Today, those costs are $545 million, including debt costs paid through Manitoba Properties Inc. This represents 12.5 percent of revenue. As I indicated earlier, interest paid in the money markets of the world is not available to provide good education, good health care and good roads in Manitoba. During the past six years, General Purpose Debt tripled, interest costs quadrupled. Increasing shares of the tax dollar were needed to pay for borrowing. Less was available for programs Manitobans needed. Borrowing increased again and, inevitably, tax burdens escalated to among the highest levels in Canada for middle- and upper-income earners. We are committed to regaining control of the debt and thereby the growth and interest costs. We are determined to reduce and eventually eliminate the province's annual deficit. We believe this can be accomplished through better management, while protecting programs essential to meet the real needs of Manitobans. The second and third phases of the Independent Review will help us move further toward that goal. Mr. Speaker, when we assumed office on May 9, the fiscal year had already started. We carefully reviewed the spending plans then in place and made some important changes. We are determined to strengthen our economy, and to take action to meet the special needs of rural Manitobans beset with drought, and to protect our forests ravaged by fires. We have ensured that there will be sufficient resources to provide high-quality health care, education and other social programs. We have put in place new initiatives which begin to fulfil our election commitments. Among the most important of these is our effort to bring better management to Government by reducing waste and duplication and streamlining Government operations. Manitobans recognize the contribution that positive and supportive Government can make to improve our economy, to enhancing investment opportunities and to creating more jobs. The most serious economic challenge now facing Manitoba and Canada is the worst drought in half a century. Governments can and must respond with help for our farmers. Reflecting the serious situation facing our farmers, the Agriculture Budget is up more than 50 percent from last year, to $115 million. Some $18.3 million, including $4.5 million in federal funds, are earmarked for emergency drought assistance. A further $700,000 is included for drought proofing. These measures offer needed-immediate assistance and begin work on longer-term measures to protect farmers and rural communities from the effects of subsequent droughts. We are also moving to fulfil our promise to work toward the elimination of provincial school taxes on farm land, with a commitment of $12 million for the Education Tax Reduction Program for Farmers. The new program provides a 25 percent across-the-board reduction in the school taxes assessed on all farm land in the province. The provincial benefit will be paid at the time of property tax payment. Those who have already paid their property taxes will receive rebates from their municipalities. Land owned by financial institutions will not be eligible for benefits. Transportation is the key to economic activity in our province. Without a high-quality road network, Manitoba businesses would face insurmountable obstacles in reaching new and serving existing markets. We have, therefore, added $7 million in new money for highway construction, to the amount proposed in the defeated Budget. Planned activities this year include: * twinning of the Trans-Canada Highway through the Grand Valley west of Brandon; * survey and design work leading to an earlier completion of four lanes on Highway 75 from Winnipeg to the American border. We are determined to stop the deterioration of our roads and highways and work toward needed improvement. Services and initiatives supporting business development and tourism are also being integrated and streamlined under the new Department of Industry, Trade and Tourism. The mandate of the new department will recognize the need for balanced economic growth throughout the province. To implement this mandate, a new Rural Economic Development Committee of Cabinet will be struck, supported by a departmental unit dedicated to this initiative. As a major priority, the new department will undertake a wide-ranging review of options to improve access to investment capital for businesses in Manitoba. The review will include a thorough appraisal of alternatives, including a Manitoba Stock Savings Plan. It will also consider options to provide a more competitive environment for manufacturing in Manitoba. The initiatives we bring forward in 1989 will respond to the needs of Manitoba businesses, especially small- and intermediate-sized enterprises that form the backbone of the economy. Tourism is also a major focus for the new department. Increased emphasis will be placed on tourism promotion and enhanced development of Manitoba attractions. To allow Manitoba tourism to begin to compete on an equal footing for its share in national and international markets, I am pleased to announce an immediate increase of $1 million for a major new initiative in tourism marketing this year. As a further measure of assistance to the tourism and hospitality sector, liquor mark-ups have not been and will not be applied to supplier cost increases this year. As well, we are fulfilling our commitment to maximize use of the Canada-Manitoba Tourism Agreement with an allocation of $1.4 million. Mr. Speaker, Manitobans value their social and community programs. They want to know that these services will be secure not just in the short-term but also for future generations. A healthy economy provides the best guarantee for the future provision of health, education and social programs. Our economic initiatives, including tax changes I will announce shortly, will strengthen our economy. This Budget allocates $2.7 billion, up 7 percent to priority health, education and social services this year. We will maintain these programs for Manitobans. In Health, $1.5 billion is committed to maintain vital services, up 9.1 percent from last year. This total includes: * $760 million for hospitals and community health centres; * $263 million for medical services; * $181 million for personal care homes; * $45 million for home care; * $42 million for mental health services; and . $40 million for Pharmacare. This Budget provides $11.4 million more for medical services, and $10.4 million more for hospitals-in large part, to pay the costs of contract settlements with doctors and nurses-which were not sufficiently provided for by the former Government. The Health Budget also includes three important initiatives promised during the election: . $500,000 for the creation of a Health Advisory Network, comprising representatives from Government, health care professionals, administrators, unions and the public, with a mandate to hold public consultations and recommend a health care action plan for the 1990s which incorporates new and innovative approaches. . $100,000 for a badly needed new Youth Drug Abuse Program; and . $150,000 for Industrial Health Promotion. Additional resources have also been provided to expand women's services at River House. This additional funding will ensure the continuation of this important residential facility for women seeking treatment. This Budget includes important commitments to improve the range and quality of educational opportunities. The Education Budget, at $792 million, is up 3.3 percent over last year. School divisions will also benefit from the accelerated remittance of school taxes. The Budget includes: . $686 million for primary and secondary education, $473 million from general revenue and the balance from the Education Support Levy; . $184 million for universities; and . $78 million for other post-secondary, adult and continuing education programs. The Education Budget includes funding for important initiatives promised during the election: . $11.1 million for independent schools-an increase of $3.3 million, bringing support to 40 percent of the average per pupil grant received by public schools. This is a first step toward our commitment to provide funding of 50 percent of the public school per pupil grant. . $300,000 for a Task Force on Literacy. We are determined to take action to help those who cannot read or write, and to upgrade the skills of those who left school before Grade 9. . $4.9 million, including $636,000 in new funding for the Distance Education Branch, to improve the delivery of courses for Manitobans in rural and remote areas. The Budget for Community Services is up 9 percent, to $195 million. Included are: . $65 million for social services; and . $124 million for child and family services. Nearly $36 million is budgeted for day care programs, a 23 percent increase. This funding will enable Manitoba to take advantage of federal funding and meet our commitments to increase the number of day care spaces and the range of options for parents seeking quality child care. The Budget also includes increased funding to support the Child Protection Centre at the Health Sciences Centre in providing reliable clinical services and training related to the growing number of child abuse cases. The Budget for Employment Services and Economic Security is up 5.6 percent, to $267 million, including $205 million for social allowance programs. This Budget provides $2 million more for cost-sharing municipal assistance than the defeated Budget. An additional $1 million will be dedicated to a new pilot project to provide more skills and training to enhance social assistance recipients' employability. A further $400,000 will be added to the Single Parent Job Access Program to help single parents on social assistance. To keep our promise to Manitoba's seniors, a Seniors' Directorate will be established to give added focus and coordination to Government programs responding to senior citizens. The Directorate will report directly to the Minister responsible for Seniors (Mr. Neufeld). The Budget for the Department of the Attorney General (Mr. McCrae), including Corrections, is up 4.2 percent to $132 million. Resources are provided to fulfill a number of election commitments, including reconstituting an independent Law Reform Commission; reinstating RCMP services in rural Manitoba; and stopping the planned amalgamation of the Law Enforcement Review Agency with the Manitoba Police Commission. In addition, resources are being provided to finance the Inquiry into Native Justice and to support Community Crime Prevention. Our relations with municipal Governments will be based on recognition and understanding of the important contribution they make to the quality of life throughout the province. We are determined to deal more openly with Manitoba's municipalities. We will consult before making major decisions and we will listen. In this spirit, I am pleased that a new schedule of school tax remittances is now being implemented. That schedule results from an intensive round of consultations. Municipal Governments provide important services in a more effective manner than can be achieved through a centralized bureaucracy. Municipalities will, therefore, retain responsibility for administering short term welfare. Uniform regulations will be developed to ensure all Manitobans requiring this assistance are treated equitably. Our Budget measures reflect our commitment to municipal Governments and the communities they serve. Support provided through the Departments of Municipal and Urban Affairs has been increased $9 million, helping to provide services to local residents with less reliance upon property taxes. A new Urban Native Adjustment Strategy will be developed. Again, we plan to consult with Native organizations as well as local Government bodies and the federal Government. Most importantly, for municipalities, this Budget rescinds the arbitrary cap placed on Provincial-Municipal Tax Sharing payments by the former Government. The commitment to tax sharing in the legislation will be honoured. This means that local Governments will receive $47.1 million in tax-sharing payments this year, a $7.1 million or 17.8 percent increase, and a share of growth in income tax revenues in years to come. In addition, municipalities will no longer be required to pay the municipal water tax. We promised to maintain and protect important services, both today and in the future. This Budget delivers the needed resources to accomplish that today, and begins to take action to secure the fiscal and economic base of the province and our ability to pay for these programs in the future. Work has also begun on streamlining Government operations, eliminating duplication and reducing overhead costs. This work will secure valuable savings this year and larger savings in the future. As a first step, we reduced the size of Cabinet. This decision points the way toward logical consolidations of departmental operations to secure additional savings. The central Planning and Priorities Committee bureaucracy has been abolished. The Jobs Fund Programs have been transferred to the departments responsible for program delivery, thereby ending unnecessary duplication. The Manitoba Energy Authority, formerly financed by non-budgetary borrowing, will be included in the Budget for the Department of Energy and Mines. In this manner, spending by the Authority will be given the same careful scrutiny in the Legislature as that accorded other programs. Departmental reorganization and consolidation will provide services more efficiently and effectively. In addition to the new amalgamated Industry, Trade and Tourism Department, Cooperative Development has been merged with Consumer and Corporate Affairs, and responsibility for Corrections has been transferred to the Attorney-General. Together, these measures represent a significant start on improving accountability and efficiency in the delivery of Government programs. By providing greater clarity in the responsibilities of departments, the concerns of Manitobans can be met more effectively. A number of improvements are also planned to make Crown corporations more responsible and accountable to the people of Manitoba. Comprehensive legislation will be introduced to ensure an appropriate and effective structure for Crown corporation accountability. In this way, Manitobans can be assured that the Crowns are meeting the real needs of the province. Additional action on both general Government operations and the Crowns will be taken following completion of the second and third phases of the Independent Review of the management of Government and Crown corporations. Our Progressive Conservative Government is committed to creating a stable and competitive taxation regime in Manitoba. As a first step in meeting that commitment, I am pleased to announce that there will be no increase in personal income taxes during our first term in office. For the first time in many years, tax reductions will exceed tax increases. Our Government will, however, be proceeding with a small number of tax increases proposed in the former Budget. . The tobacco tax will be increased 0.9 cent per cigarette effective September 12, 1988. . The leaded gasoline surcharge will increase 0.9 cent per litre effective September 1, 1988. . The aviation fuel tax rate will increase by 1 cent to 5.8 cent per litre effective September 1, 1988. These measures will add $8.4 million to revenue this year. Most Manitobans recognize the importance of protecting the competitive position of the Manitoba mining industry and its ability to generate jobs and incomes for Manitobans. For this reason, we will not proceed with a number of measures previously proposed, including the so-called 7 percent refundable tax, the doubling of the mining claim lease tax, the reduction in the effective processing allowance tax from 10 percent to 8 percent and the termination of the Mining Community Reserve Fund. We are proceeding with a more limited set of mining tax increases. Specifically, the mining tax rate is increased to 20 percent from 18 percent and processing allowances greater than 10 percent of processing assets will no longer be permitted. These changes are effective for the full 1988 year and will add $21 million to revenue this year. Members will recall that the 7 percent refundable tax had been proposed to correct unfairness in a federal-provincial formula for allocating corporate taxable income of mining companies among the provinces. However, the mining companies would still have to pay corporation income tax on the same income to other jurisdictions. In our view, the resulting double taxation on mining companies would be a major disincentive to increased mining activity in our province. I am pleased, however, that the Mining Association has agreed to work with Manitoba and other jurisdictions to propose changes to the federal-provincial tax allocation rules. We are hopeful that solutions will be developed through this cooperative process. I am also pleased to announce that the Manitoba Mining Association and the Manitoba Government will establish a joint task force to investigate and recommend cost-effective ways of enhancing mining and processing in Manitoba. We are confident that this cooperative approach will be mutually beneficial to the mining industry and Manitobans. As mentioned a moment ago, there will be no increase in personal income taxes. There will be no increases in retail sales taxes. In fact, Manitobans will benefit from a $52 million reduction in their provincial income taxes this year, as we move to ensure that the benefits of National Tax Reform are passed on in full to Manitobans. Manitoba taxpayers will also benefit from a $91 million reduction in federal income taxes. For example, typical families of four will receive the following federal and Manitoba income tax reductions: * $841 at $25,000 in annual income; * $366 at $35,000 in annual income; and * $197 at $50,000.00. In light of the improved financial situation of the province, we have decided not to proceed with the previously planned $8 million, 25 percent increase in motor vehicle registration fees at this time. We are committed to creating a more competitive environment to foster job creation through business investment and growth. Therefore, there will be no increase in corporation income taxes or capital taxes. The railway fuel tax will not be increased as proposed by the former Government. Tax reductions will be provided to help small businesses. Manitoba's payroll tax is a major disincentive to the creation of new jobs in Manitoba. Investors cringe when they hear Manitoba is only one of two jurisdictions in North America with a payroll tax. During the election campaign, we promised to double the exemption under the payroll tax, effective January 1, 1989. Today, I am especially pleased to announce that the payroll tax exemption will be tripled from $100,000 to $300,000 effective next January I. Employers with payrolls between $300,000 and $600,000 will benefit from a reduction in their payroll taxes. The payroll tax will be eliminated for 46 percent of currently taxable employers, and reduced for an additional 17 percent under this measure. Almost two thirds of currently taxable employers will benefit from payroll tax reductions. We will also be introducing technical changes to exempt the trucking industry from the payroll tax on out-of-province activities. Revenue will be reduced by $3.9 million in the current fiscal year and an estimated $23.3 million in 1989-90 as a result of these measures. Our Government is keenly aware that the prosperity of our province depends on home-grown businesses. The future health of the Manitoba economy requires enterprising Manitobans, people with new products and new ideas, to start new businesses and to create new jobs. We want to send a clear signal that our Government recognizes the importance of these people. The increased payroll tax exemption will remove a major disincentive for small and intermediate sized Manitoba enterprises. We want to stimulate entrepreneurship and increase business activity. Small business men and women are prepared to pay their fair share of taxes. We want to help them in the critical first few years of operation. This afternoon, I take great pleasure in announcing a further initiative to encourage new small businesses. Businesses incorporated after August 8, 1988, and before January, 1, 1991, will be eligible for a corporate income tax holiday in their first year of operation, and phased reductions over the next four years. The ability to retain more earnings to invest and employ more people will generate more economic activity and more tax revenue in the longer term. Finally, we will also undertake consultations with the business community in the area of regulatory reform. Specifically, the review will concentrate on improving business input into the design of regulations, and to finding ways to reduce red tape. After a series of Budgets which imposed new taxes and increased old taxes, Manitoba people and businesses will be relieved that tax reductions outlined in this Budget outweigh increases by more than two to one. Restoration of a competitive tax environment is fundamental to the rekindling of business and investor confidence, job creation and capital investment. The proposals in this Budget-keeping the lid on personal income taxes, rolling back some of the increases proposed in the defeated Budget, eliminating the payroll tax for half the taxable employers in Manitoba and the tax holiday for new small businesses-are important steps in that direction. This Budget begins the process of regaining control of the province's finances. Total budgetary expenditure is estimated at $4.561 billion, up 6.7 percent from last year's actual spending before extraordinary expenditure. Revenue is estimated at $4.365 billion, up 8.6 percent. As a result, the deficit, including both current and capital spending, is estimated at $196 million, the lowest since 1980-81. Capital spending alone totals $278 million. Total borrowing requirements amount to $1.288 billion. This includes funding for the province's deficit, sinking fund allocations, non-budgetary capital requirements of Crown corporations and agencies, and refinancing of debt issues redeemed during the year. The projected increase in the province's total debt is $572 million, the smallest increase since 1982-83. Record mining revenues, and the full year effects of taxes imposed last year, boosted revenue growth this year. Without these special factors next year, revenue growth will slow significantly. Our future progress in reducing the deficit and stopping the growth in tax supported debt will depend on controlling growth in spending. During the election, we promised to introduce multiyear budgeting. In our budget for the next fiscal year, we will include an additional year's fiscal projection to help provide a more complete review of the context in which decisions must be made. We cannot continue indefinitely with Government spending growth at two times the rate of inflation, as has been the case in recent years. My goal in 1989 will be to hold overall spending increases near the rate of inflation. This has been an extraordinary year in the political life of Manitoba. When our Government assumed office just three months ago, there was much to be done. The province had to be put on a new course. Sound fiscal management had to be restored. Many aspects of Government operation had to be reviewed. This Budget responds to those challenges. It ensures that spending meets the real needs of Manitobans, particularly in the vital areas of health and social services. It begins to rebuild an environment in this province which encourages investment and employment, an environment which allows creativity to flourish and our economy to grow. It incorporates the first results of a thorough, independent examination of how to improve the management of public resources and make Government work better. Manitobans will soon begin to see the results of these initiatives. This Budget marks the directions which we must follow. It is a signpost to a future which, with hard work and honest effort, holds the promise of hope and integrity for all Manitobans. I thank you.