Budget will boost consumer debt, says credit counsellor
Many people who are already struggling to live pay cheque to pay cheque will take on more debt as a result of the Newfoundland and Labrador budget, says a local credit counsellor.
"Our concern, our fear at this point in time is that this latest increase in taxation is going to be transferred into consumer debt," said Al Antle, executive director of the free Credit Counselling Service of Newfoundland and Labrador
"In other words, we're not going to change our spending habits. We're simply going to run this amount of money onto our lines of credit or credit cards," he said.
"Instead of spending $2,000 less next year, people will owe $2,000 more.
Antle told CBC radio's Central Morning on Monday that household debt is already high in this province.
"For every dollar we earn, we owe $1.64 so it's pretty scary stuff."
Antle predicted more consumer bankruptcies, which he said leads to turmoil, and takes a long time to recover from.
"We were seeing an increase in bankruptcy numbers in this province ... in any event. Bankruptcy is far more socially acceptable than it's ever been before."
Antle said people who cannot get credit or who are on a very low income will have to do without.
"People will cope by having less, by having a lower standard of living, by you know, not being able to consume goods and services that they need," he said.
"For every dollar we earn, we owe $1.64 so it's pretty scary stuff." - Al Antle
There could be more bad news coming, according to Antle, if the cost of heating a home goes up later this year.
He said government employees started expressing their concern months ago, in January, and the concern has escalated since budget day.
"It was interesting that our phone started ringing Friday morning (the day after the provincial budget), with people wanting to book appointments," he said.
With files from Central Morning