This Is No Expansionary Budget
By: Tsudao Gurirab
THE 2013/14 budget is a curate’s egg. The proposed expenditure for 2013/14 is a whopping 19% increase on the year which is ending this month. From the minister’s statement in Parliament last week, it was clear that the bulk of the increase – i.e. N$6.2 billion of N$7.5 billion in fiscal 2013/14 – will pay for an increase in the civil service wage bill.
This total allocation for 2012/13 was a princely sum of N$ 40.1 billion, which means the increase for the rest of the items put together is no more than N$1.3 billion. The minister of finance, Saara Kuugongelwa-Amadhila, told us that the development part of the budget increases from N$6 billion to N$8 billion except our figures or the minister’s do not add up.
In the current global crisis which has its origins in the US sub-prime housing folly, later exacerbated by the euro zone financial crisis, we are on the same page with the authorities that we have to spend ourselves out of the current crunch by stimulating demand through supply-side measures. And for that reason we were disappointed that our much-vaunted expansionary budget is in fact a scarecrow and not an expansionary budget.
The minister said of the N$42 billion voted by Parliament last year only N$32.6 billion was spent – i.e. 88.4% of the operational and 76.6% of the development budget, including Tipeeg [Targeted Intervention for Employment and Economic Growth]. With the authorities now accounting for Tipeeg funds as part of the regular budget, they are pulling a fast one on us with their fables of an expansionary budget.
Worse still, they appear not to have the capacity to spend the funds budgeted. Well let us hope they find the civil servants and pay them the N$6.2 billion because that is really what the increase in this budget amounts to. But to her credit she mentioned that droves of civil servants will be sent off to NIPAM [Namibia Institute of Public Administration and Management] to master the basics of bookkeeping and running a government.
We welcome the N$50 increase for the old-age pensioners. We recognise too that it is an increase in real terms as it is inflation beating. It may be an idea to consider to have the pensions indexed to the rate of inflation annually. The old-age pensions are, of course, part of “the promotion of the welfare of the people” according to Article 95 of our Constitution. However, we are aware of large pockets of pensioners in the wastes of our country who do not receive this pension as they do not possess national documents. Working together, the ministries of health and finance need to go out with the missionary zeal of a Libertina Amathila and affirm these Namibians.
We welcome too the measures announced to help first-time home owners and low-income earners to keep more of their income and give less of it to the taxwoman. Despite no precise figures being available, it is a fact of our life that the youth are the ones particularly affected by the scourge and the hopelessness of unemployment. For this reason we commend the authorities for the enlightened approach by increased allocation for youth activities. It is our hope that this will translate into helping the young to create durable, sustainable activities, jobs programmes and not mind-numbing workshop after workshop.
Whilst the announcement made in respect of tax brackets is also positive, authorities, in future, need to be mindful of the undue time lag before upward adjustments are made. As for the announcements made in reducing both corporate and individual taxes, these are of the progressive type but it appears as if the authorities intend to claw most of these concessions back with the raft of forthcoming taxes announced by the minister, at least in respect of the corporate sector. These are the proposed Environmental Levy as well as the Exploration Act. These seem to negate the concessions being given to investments in mining over the three-year MTEF [Medium Term Expenditure Framework] period.
Despite the minister’s assurances that the government’s spending priorities in this budget reflect government’s priorities as set out under NDP4, the figures tell a different story. For one, given the looming drought and the real possibility of lost of livelihood, government’s proposed plans under agriculture, which is one of the selected economic sectors under the NDP4, do not reflect this. On the contrary, the nation’s resources are increasingly consumed by defence spending as we wait to serve in some UN intervention some day. Yet the patent truth is that most Namibians make their survival from the land.
We can only hope that the 2013/14 plans so painstakingly laid out a week ago by the minister will work, because therein lies our collective prosperity.