Thank you, Mr. Speaker. I have scratched a few notes in response to Mr. Pollard's budget address, which he delivered to us on Friday. This is the budget session and we are supposed to take this as the major item of business. So, Mr. Speaker, as I have done on every other occasion, I would like to make a short reply to it.
I think that Mr. Pollard demonstrated to us on Friday how weak we are as a government. We have virtually no room to manoeuvrer in raising revenue because of our very low population base. As a result, we have to resort to the usual balance of tax initiatives and expenditure cuts to live within our means. Unfortunately, even the most powerful economies have had to resort to this conventional approach in recessionary times. Because of our low population, however, the emphasis is more on the cutting of services and the redistribution of wealth, rather than on any real significant tax measures.
The payroll tax at one per cent has proven to be controversial, Mr. Speaker, not because of the amount involved, but because it misses the target. To many people the government has created an elephant trap to catch a mouse. In order to hit a target of 3,000 non-residents, everyone is taxed to make it palatable to northerners. Tax credits are then returned to northerners according to levels of taxable income. This means that residents of large centres such as Fort Smith and Yellowknife would bear the cost of the system. Although references are made to the economy in the budget, Mr. Speaker, nowhere do I see an expanded economy and the creation of greater wealth as a solution to our fiscal problems. We will continue to see the usual measures of adjusting the formula funding of cutting benefits and services and tinkering with minor tax initiatives as the way to go.
We continue to be narrowly focused and we will continue to be cursed by this unless we get away from the one track approach to our economy. We seem determined to resist the creation of a genuine private sector. We have not felt the recession the same as other Canadians because we really have an artificial economy completely dominated by the government and we do not seem to want to get away from it.
If Mr. Siddon is sincere about giving us the tools to secure our economic independence, this would be a far more significant tool to secure our future than any minor changes to the formula funding arrangement that we currently have.
Even though we have, in my opinion, a third world economy with very little generation of wealth, I had hoped to see some indication that we were ready to create the conditions for genuine economic development. The $6 million for training looks good but it is a one-time expenditure and human resources, unfortunately, cannot be developed in one year. It takes much longer than that. I see a great need to attract capital and to create wealth. To do this we need a stable political system where there is public confidence and certainty about the rules for development. We have talked about the need for infrastructure. Unfortunately, Mr. Speaker, the responsibility for infrastructure, to the level we would like to see, still rests with the federal government and we are still very dependent on someone else's vision of how this part of the world is going to develop.
The key issues of human capital development, investment and infrastructure go beyond, I realize, what Mr. Pollard has addressed in his budget. If we accept that the generation of wealth, the creation of a bigger pie and an expanded economy are the only real significant sources of new revenue and that we need new powers from the federal government, we must put our political house in order to inspire confidence among investors.
I think Mr. Pollard has done a credible job in meeting the realities of reduced funding from the federal government and also he has attempted to tinker with ways in which we can reduce some of the benefits which people have had in the Northwest Territories for a long period of time. The big problems we have to resolve go beyond what we can expect him to address in his budget address to us. I believe the solution, in the long run, is the creation of economy and the creation of greater wealth, not just simply cutting services and trying to find a few million in taxes. It is a far greater problem than that. Thank you.