FIFTH BALANCED BUDGET INVESTS IN PEOPLE, CUTS TAXES AND REDUCES DEBT

Released on March 19, 1998

A two-point reduction in Saskatchewan's Personal Income Tax keeps the

Province on its course towards lowering taxes in an affordable,

sustainable manner, Finance Minister Eric Cline said today.



In tabling the Province's 1998-99 Budget, Cline noted that continued

sound financial management and a growing economy has allowed the

Government to cut taxes, reduce debt and invest in Saskatchewan

people.



"This Budget is about people -- about responding to the issues people

have said matter most," Cline said. "Our Government has set out its

second-term agenda for lowering taxes; reducing debt; and investing in

jobs, highways, education and training, health, families and

communities -- a balanced program, which Saskatchewan people have

strongly endorsed. Over the last year, we have made significant

progress in many of these areas. Today's Budget builds on that

progress."



Major new investments announced by Cline include:



$219 million for highways -- an increase of 10 per cent -- as

part of the Province's 10 year, $2.5 billion commitment to

building a modern, reliable transportation network;



$1.7 billion for health -- the largest investment ever in

Saskatchewan's health system, and $88 million more than

provided in the 1997-98 Budget;



$136 million for the Saskatchewan Training Strategy to

provide skills training opportunities to 23,000 Saskatchewan

people;



increased operating and capital grants to schools,

universities and federated colleges;



increased resources for policing and community safety

initiatives;



$53 million for Saskatchewan's Action Plan for Children;

and,



funding for social assistance redesign initiatives including

the Saskatchewan Child Benefit, a new Saskatchewan

Employment Supplement and extended Family Health Benefits.



"The credit for turning the Province's finances around belongs to

Saskatchewan people," Cline said. "They are now seeing the

benefits of their past sacrifices. We are not yet in a position

to do everything we would like, but we are building on the

momentum towards a more secure and prosperous future."



Cline said the reduction in income tax is another step towards

lower taxes, building on last year's two-point reduction in the

provincial sales tax and cut in the Debt Reduction Surtax

implemented in 1995 and 1996. Combined with Saskatchewan's

contribution to federal income tax changes, the annual savings to

Saskatchewan taxpayers will be about $58 million.



"When this reduction is added to the cuts in provincial taxes

since 1995, Saskatchewan families earning $50,000 a year will be

better off by almost $600 a year. Families earning $20,000 a

year and receiving the new Saskatchewan Child Benefit and

Saskatchewan Employment Supplement will be better off by over

$1,500 a year."



The 1998-99 Budget also includes increased investment in jobs and

economic growth.



"People agree that jobs are the key to keeping our young people

in Saskatchewan," Cline said. "We are supporting job creation

with initiatives at the local level through Regional Economic

Development Authorities and new Neighbourhood Development

Organizations. We are also expanding our targeted tax strategy

to promote further growth and innovation in key industries."



The business tax incentives announced by Cline include:



a 15 per cent research and development tax credit, available

to a broad spectrum of industries;



an oil and gas tax credit to encourage innovation in

recovery and production methods in that sector;



a sales tax exemption for the purchase of mineral

exploration equipment;



a reduction in the deductible amount for the Livestock and

Horticultural Facilities Tax Credit from $500 to $100 to

help farmers succeed in new markets; and,



a new Film Employment Tax Credit to encourage more film and

video production and jobs in Saskatchewan.



The Minister emphasized that all of these initiatives have been

undertaken within the context of continued careful financial

management.



"We are determined to pay down the mortgage on our children's

future, and strict attention to keeping the budget balanced

allows us to do that. This year, we will pay a further $500

million towards the debt. Added to last year's amount, we will

have taken $1.2 billion off the debt in just two years."



Cline noted that, while uncertain resource prices and other

factors underscore the need for a cautious approach to financial

management, Saskatchewan people have every reason for continued

optimism. "Our economy is growing and diversifying. Incomes are

going up. Taxes are coming down. Once again, the future is ours

to decide."



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For more information contact:



Sandra Lodoen

Saskatchewan Finance

Regina

Phone: (306)787-6578