BASHING THE BUDGET
On Monday, the Minister of Finance and Economic Development, Thapelo Matsheka, delivered the Budget Speech for the 2021/22 financial year.
It was a speech that left the majority of people disappointed.
The Voice’s DANIEL CHIDA caught up with three leading members of the various opposition parties to find out why that might be.
Moeti Mohwasa - Umbrella for Democratic Change, Head of Communications
A budget is defined as a process of sharing a national cake, which is made out of citizens’ taxes and common national resources such as minerals and sales of other national assets. The budget must therefore be fair and benefit everyone who has a stake in the country.
This budget is a rich man’s budget and shows the state’s determination to extract more resources to enrich its coffers while impoverishing Batswana.
A budget under Covid should have been more creative and put more money in the hands of the informal sector and small businesses, farmers’ produce, introduced unemployed allowances and excluded basic foods from Vat.
Instead, government has increased VAT, BHC rentals, electricity tariffs, water tariffs and transport costs through increase of fuel prices. This is BDP at its best, a failed government. Batswana are feeling the impact of successive budgets under BDP rule. A budget can either reduce or increase the gap between the haves and have-nots.
Mohwasa
Turning to the current budget, we believe Batswana have nothing to celebrate. In fact, they have every reason to be worried as it is clear our country is on a downward trajectory. There was hope that the budget will come with a Marshal Plan to revamp our ailing economy. Covid-19 is on the rampage and the future is so uncertain. People had hope but that hope has now turned into despair. The increase of the Income Tax threshold will come to naught as whatever will be gained will still be taken by the Taxman through increased VAT. In the face of the Covid rampage, the government is not saying much. It is business as usual as we await WHO and MTN donated vaccines.
It is unfortunate that the government still does not want to accept that the poor performance of parastatals has to do with its inability to adhere to good
corporate governance, accountability and meritocracy. Our Parastatals are not performing because there is rampant corruption. For example, a project that should have cost government P600m ends up costing P900m because of padding. The difference is money that could have been used to raise the standard of living for our people through provision of much-needed social amenities or increase in social grants for the poor and elderly.
Ethiopian Airlines, a parastatal, is one of the best airlines in the world. The government should know that efficiency is a function of management not ownership. Minus corruption, these entities can provide employment and generate profit. Put aside the sugar coating, according to the Budget Speech, government has embarked on a path to throw some of its workers into the streets just like it has done with those in the parastatals. The privatisation that is being talked about is also going to put more people in the streets.
The BDP government has absolved itself from the responsibility of maintaining and creating job opportunities. As if that is not enough, it fails to come up with figures that indicate how many jobs are going to be created as a result of the envisaged 8.8 percent economic growth. What we have is a government that has abdicated its responsibility to care for its citizens. As a nation, we just have to accept what the opposition has said over the years. The BDP government is not there to serve our interests.
Phenyo Butale - Alliance for Progressives, Secretary General
The 2021 Budget is underwhelming, analysed through the perspective of what we are up against: the coronavirus and the need to radically transform the structure of the economy as well our governance architecture.
One would have expected the minister to present a clear vaccine plan; what type of vaccine are we going to get, how many doses are we expecting to administer in how long, when do we expect to start vaccinating the public, what criteria is going to be used, how much the procurement and logistics of administering will cost us. The budget is surprisingly (but expected of this government) quiet on all these.
The issue of vaccine is not only to deal with the aspect of health, it is also to help us deal decisively with the economic aspect. If we have vaccinated enough of our population, then we can be able to open up the economy, without having to deal with the dire constraints we are having today of lockdowns and curfews.
‘This budget is a rich man’s budget!’ Mohwasa ‘Our view is this is the wrong time to increase the taxes and levies,’ P. Butale
There is no urgency in the budget to deal with the structural problems and institute the necessary reforms to build a new economy not dependent on diamonds but on other sectors, specifically: agriculture, manufacturing, economic infrastructure, digitisation and a thrust into green energy for our power needs. The budget decries wastage, something that has been there for a long time, yet offers nothing at all on corrective measures. There is introduction of taxes and levies. Our view is this is the wrong time to increase the taxes and levies, while people are still reeling from the devastating effects of the pandemic - having lost jobs, businesses closed down and most taken pay cuts. The problem really is not that there are no adequate taxes, the government is misusing the available funds and has a failure in terms of collecting the taxes and other rates and levies. With the pinch the country is feeling on finances, you would have thought the minister would propose legislative changes to curb down rampant corruption, alas the budget is quiet on this. The minister is also not giving an update on the many promises that he made on the last Budget Speech, consistent with how this administration works - make promises, and more promises and deliver nothing.
Biggie Butale - Botswana Patriotic Front, President
The 2021-2022 National Budget was crafted against the backdrop of a pandemic tearing the world fiercely. Covid-19, though a health challenge, has presented itself as an agent of negative economic growth more than anything. We have experienced business and life interruptions themed `Covid-19 protocols’. While the people may play their part in adhering to the protocols, it is important for the government to dig deep and prioritise the social and economic survival of its people.
The budget falls short, by far, of protecting the survival of Batswana. On the contrary, the budget has sounded a death knell to the hopes and aspirations of the poor, deprived and oppressed majority.
Tax should not be used as a substitute for modern day slavery. As an economic tool, tax is used to regulate liquidity in the market. Various forms of tax measures are deployed to achieve an economic end of making the market a better place like in controlling inflation, managing excess liquidity, price controls, management of the value of the currency. Raising funds for government is a residual benefit of a robust tax management system and not the primary target. It is clear from the Budget Speech that government lacks innovation to pursue other avenues to raise capital. It is not shocking, it was expected. The current regime lacks the passion and innovation to paint a picture of a better Botswana
and devise ways and means of arriving at a shared destination. They cannot inspire Batswana to hope for a better life. When economic challenges pose a small provocation, they respond by emptying foreign reserves, prioritising `expensive toilet projects’ over critical supplies like vaccines. Our government has misplaced priorities. They prefer to invest billions on duplicate water pipelines in order to receive kickbacks and to `repay’ BDP donors, than to spend a few hundred million in procuring testing kits, personal protective equipment and the vaccine. And in all, this President finds it prudent to make maintenance of P48 million at his office! The current government does not have the ability to engineer the economy towards prosperity. We, the people, are paying for their school-boy errors while others line their pockets with our hardearned money.
‘The budget has sounded a death knell to the hopes and aspirations of the poor, deprived and oppressed majority,’ B.butale
When it comes to impoverishing Batswana, the BDP government is very innovative. They have cooked up all forms of indiscriminate taxes including the levy on second hand imports all in an attempt to pay back donors for elections funding. The end result of the sugar tax, the increase of BHC rentals while unemployment continues to grow, is that our people on `Ipelegeng’, the unemployed and the underemployed, will fund the budget. Instead of plugging the capital drainage holes in our economy like taxing repatriated profits, government has decided to put a nail in the coffin and finish off the little man on the street selling cool time to buy to put a warm meal on the table.
The small second hand car dealer in Mogoditshane is being targeted to benefit billionaires more. These are serious challenges that we must confront. The rich foreigners will continue winning governments tenders and repatriating their profits to their countries of origin, billions in aggregate, while the poor ` will shoulder a heavy tax burden.