Thank you, Mr. Chairman. Finance, expenditures and savings. Noting that the Standing Committee on Government Operations has been informed of the deficit for 1994/95 will be less than forecast, committee members requested information on the subsequent savings on interest costs to the Government. The Minister stated that the Government is only half way through the year and there has not been a need to borrow yet.
However, it is projected that interest payments will be substantially lower and there will be a savings of approximately one million.
Tax options. Committee members discussed the implications of the BHP diamond project with the Minister. Members were told that discussion were under way with BHP regarding the establishment of a sound employment strategy, provisions ensuring the priority of using competitive northern businesses and a tax regime that would benefit the north as well as the company.
The Minister informed the committee that a tax options paper was being developed by an inter-departmental committee and should be available to members for review in October.
Consolidation of tax administration and revenue. Apparently there is no actual dollar savings from amalgamating the divisions of tax administration and revenue and assets management. The Minister did state, however, that the amalgamation has improved efficiency by reducing the paper flow. This makes up for areas which are extra work for the Department such as the payroll tax.
The Government is presently reviewing the desirability of maintaining the payroll tax. At this time the Minister stated that the payroll tax is regressive and he is considering eliminating it. The costs to administer the tax do not justify the net revenue realized. The gross amount collected is approximately twelve million but eleven million is paid out in the cost of living tax credit and administration costs total three to four hundred thousand dollars, leaving a net benefit of only six to seven hundred thousand dollars. Committee members agreed that this tax is not cost effective. The Committee recommend that the government repeal the payroll tax.
Mr. Chairman, I will now ask the honourable Member from Hay River to read the next section of the Standing Committee's report.