N.S. Premier Darrell Dexter says his government should lead when it comes to cost-cutting. (CBC)

Nova Scotia Premier Darrell Dexter says his government needs to set an example when it asks school boards, health authorities and other government-funded agencies to cut costs.

Dexter said the government expects leadership from those sectors, but added that's not where it ends.

"We take ownership of this as well," said Dexter. "We are going through our departments. As Finance Minister Graham Steele has said, 'A penny saved should be a penny saved, not a penny spent elsewhere.'

"And this year, through our departmental budgeting, we have gone through and we have sat on literally every department," he said. "And I believe that we can show leadership on our side of the table."

Dexter predicted that this year every government department except transportation will come in under budget.