Grits should lock down salaries to help economy

A University of New Brunswick economist says the province should freeze the salaries of government workers and use the money on construction projects that will stimulate the economy.

“The provincially funded civil service should all have a pay freeze,” said Prof. David Murrell.

He made the comments Tuesday as he reacted to the province’s speech from the throne and to comments by Premier Shawn Graham, who has indicated that he will use expected retirements to reduce the size of the civil service.

“You can’t just do it through attrition,” Murrell said.

A salary freeze applying to nearly all of the province’s 47,000 public employees would give the province more latitude, Murrell said. He said it’s the right thing to do to free up money in the face of a recession.

“If they could save dollars on a wage freeze, they could get more stimulus through construction spending and get the benefit of construction spending,” he said.

“It should be everybody in government departments, and include health workers, people in education and social workers,” he said.

The only exception should be the province’s 5,500 nurses, he said, based on the fact that there’s a shortage in that profession.

There’s precedent for the action. The McKenna government imposed a wage freeze on the public service in 1993.

“Laying people off and forcing them to retire is harsher,” he said.

Murrell said the savings should then be put into projects such as repairs to schools, hospitals and other public buildings, work that will improve facilities and generate economic activity.

“If you speed up the repair of high schools, middle schools, elementary schools, you get the added benefit of nicer schools,” he said.

Murrell said he was surprised the throne speech didn’t include more details on what the province’s proposed tax reform might look like.

“It’s midway through their mandate and they’re not leading the way,” he said.

Charles Cirtwill of the Atlantic Institute for Market Studies said he’s pleased the Liberal government appears to still be committed to tax reform.

“That’s going to be more important now that it makes itself attractive to business,” he said.

“It’s not enough to cut taxes though, you have to control your spending, too,” he said.

Cirtwill said the province’s talk of creating an economic stimulus isn’t surprising.

“Everyone is talking about it and everyone will be doing it to prime the pump,” he said.

The important thing is to spend wisely on infrastructure that will help drive the economy even after the work is complete.