Lack of detail in Budget worries analysts

POLITICIANS and economists appeared to be generally positive about Namibia’s 2006-07 Budget but expressed concern about the lack of specifics on how to tackle unemployment, tighten the grip on free-spending parastatals and the reduction of employees in the swelling public service.

The lack of detail tainted Finance Minister Saara Kuugongelwa-Amadhila’s statement that this year’s Budget was pro-poor and pro-growth. “The only pro-poor, pro-growth specifics we heard are the N$70 increase on pensions and the infrastructure developments such as the Kudu Gas Field, which we expected.Generally, there are no surprises,” said economist Daniel Motinga of the Institute for Public Policy Research.He said Kuugongelwa-Amadhila was not clear on how much Government intends to spend on the provision of anti-retroviral drugs for HIV-positive Namibians, or even on orphans and vulnerable children.”The speech sounded much better than the actual spending.Kudu was no surprise to us, although it is a welcome boost, and there was no special mention on how the Government will reduce the civil-service wage bill.””There were also no concrete proposals on how to make the State-owned enterprises more efficient,” he said.Emile van Zyl of stockbrokers Simonis Storm Securities said there were not many surprises.”For the first time in many years, the proof of the pudding was in the eating,” he said.Drastic revenue collections, especially at the border town of Helao Nafidi (formerly Oshikango) and Oshakati, where there was a clampdown on tax evasion, and the lid on expenses were the positive developments, according to him.However, he called for clarity on interest rates, unit trusts and tax.Higher earnings from the Southern African Customs Union (SACU) have resulted in Namibia expecting a huge windfall of N$6,1 billion from that pool.That will also directly contribute to an expected surplus of N$114 million – the Minister’s target was N$511 million – this financial year .Van Zyl said indications were that the SACU money would be wisely used, with a relatively big portion of it going to capital expenditure and the repayment of debt.The Congress of Democrats’ Tsudao Gurirab said the main sources of Namibia’s income for the year will be the tax audits, SACU windfall and the fact that last year’s Budget was late and thus not all the money for capital projects was spent.He also pointed out that, despite the Minister calling it a pro-poor, pro-growth Budget, only pension increases and the development of the Kudu gas field stood out.”There is nothing in for the middle-income earners.They should have raised the taxable income level,” he said.He expressed worry over the fact that there was no real indication that the surplus was achieved because of financial prudence.”The SACU contribution is a one-off.There are no concrete measures to create long-term jobs.”Gurirab said Namibia could do better with revenue collection by strengthening the offices of the Receiver with professional staff and not just clerks.”The devil lies in the details and that (detail) we have not seen so far.She did not give us detail about spending on Air Namibia and the Windhoek Country Club and Resort,” said the DTA’s Shadow Finance Minister, Johan de Waal.”Generally it seems to be a good Budget.We have achieved a surplus without raising tax but the money from SACU helped us quite a lot”.De Waal said he was concerned about the growth of the civil service, which pushes up the wage bill and cuts spending on infrastructure.UDF leader Justus //Garoeb said the SACU money was “a temporary relief” with a worrying projection that it would decrease next year and thus result in a deficit of N$758 million, before increasing to N$1,2 billion the following year.”The only pro-poor, pro-growth specifics we heard are the N$70 increase on pensions and the infrastructure developments such as the Kudu Gas Field, which we expected.Generally, there are no surprises,” said economist Daniel Motinga of the Institute for Public Policy Research.He said Kuugongelwa-Amadhila was not clear on how much Government intends to spend on the provision of anti-retroviral drugs for HIV-positive Namibians, or even on orphans and vulnerable children.”The speech sounded much better than the actual spending.Kudu was no surprise to us, although it is a welcome boost, and there was no special mention on how the Government will reduce the civil-service wage bill.””There were also no concrete proposals on how to make the State-owned enterprises more efficient,” he said.Emile van Zyl of stockbrokers Simonis Storm Securities said there were not many surprises.”For the first time in many years, the proof of the pudding was in the eating,” he said.Drastic revenue collections, especially at the border town of Helao Nafidi (formerly Oshikango) and Oshakati, where there was a clampdown on tax evasion, and the lid on expenses were the positive developments, according to him.However, he called for clarity on interest rates, unit trusts and tax.Higher earnings from the Southern African Customs Union (SACU) have resulted in Namibia expecting a huge windfall of N$6,1 billion from that pool.That will also directly contribute to an expected surplus of N$114 million – the Minister’s target was N$511 million – this financial year .Van Zyl said indications were that the SACU money would be wisely used, with a relatively big portion of it going to capital expenditure and the repayment of debt.The Congress of Democrats’ Tsudao Gurirab said the main sources of Namibia’s income for the year will be the tax audits, SACU windfall and the fact that last year’s Budget was late and thus not all the money for capital projects was spent.He also pointed out that, despite the Minister calling it a pro-poor, pro-growth Budget, only pension increases and the development of the Kudu gas field stood out.”There is nothing in for the middle-income earners.They should have raised the taxable income level,” he said.He expressed worry over the fact that there was no real indication that the surplus was achieved because of financial prudence.”The SACU contribution is a one-off.There are no concrete measures to create long-term jobs.”Gurirab said Namibia could do better with revenue collection by strengthening the offices of the Receiver with professional staff and not just clerks.”The devil lies in the details and that (detail) we have not seen so far.She did not give us detail about spending on Air Namibia and the Windhoek Country Club and Resort,” said the DTA’s Shadow Finance Minister, Johan de Waal.”Generally it seems to be a good Budget.We have achieved a surplus without raising tax but the money from SACU helped us quite a lot”.De Waal said he was concerned about the growth of the civil service, which pushes up the wage bill and cuts spending on infrastructure.UDF leader Justus //Garoeb said the SACU money was “a temporary relief” with a worrying projection that it would decrease next year and thus result in a deficit of N$758 million, before increasing to N$1,2 billion the following year.