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Next 12 months will go to waste

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Going through the 2018/19 national budget Finance Minister Goodall Gondwe presented to Parliament on Friday, one thing is stark clear: For the next 12 months, everything fundamental that can take this country forward has been put on a back burner.

Instead, the DPP administration will spend all its energies on campaign, using taxpayers’ money so that it is retained to power after next year’s elections.

Out of the K1.5 trillion budget, Goodall Gondwe expects to generate a huge chunk of it [K1.05 trillion] locally while the rest [K209 billion] will be from grants from donors.

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Among the highlights of the budget are that traditional leaders have got a 100 percent pay rise, with paramount chiefs now getting K100,000 per month while civil servants have been given a 20 percent honoraria increment.

Other highlights include creation of jobs for youths through internships and forestation projects and the Finance Minister has thrown K10 billion to the initiative.

The minister then announced that government will also employ doctors as well as 11,000 teachers straight from college as soon as they complete their studies.

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Salaried workers free tax band has risen from K30,000 to K35, 000

Other renowned programmes that are perpetually budget drainers such as Farm Input Subsidy Programme (Fisp) and Decent and Affordable Rural Housing Programme have been boosted — with a huge allocation of K42 billion targeting one million beneficiaries for the former and K10 billion for the latter targeting 8000 houses to be built.

It is very clear that the DPP government wants to use the budget to put itself in good light with the voters and that is what is going to be its main preoccupation for the next 12 months and not governing to improve this place for the good of all citizens.

That is why all nice things have been said about the budget, especially by government apologists, that it is pro-people with Fisp and Malata subsidy boosted and chiefs rewarded with pay rise.

This is a budget in which strategic thinking that takes care of the long term has been sacrificed at the altar of short-termism with a view to achieve partisan political goals using taxpayers’ money.

At the end of the day, this is recklessness because, apart from outlining the shopping list, what Gondwe has conveniently forgotten to mention in the budget is a robust plan of where he is going to get the money to fund this seemingly never ending consumption habit.

The spending is on consumption and nothing on productivity in vital sectors such as agriculture or the private sector.

During the mid-term review of the budget, Gondwe clearly said Malawi Revenue Authority (MRA) had under-collected because productivity was low due to energy problems.

Yet although the budget has gone up by 13 percent, the Finance Minister has not said a word about how the tax base will be broadened in the most fundamental way to take care of the new expenditure lines.

Why should chiefs, a non productive group that merely exists to do the bidding of ruling parties, for example, be given a 100 percent pay raise when they cannot contribute a penny to their perks?

But Malawians know the justification as it is the chiefs’ influence which is being procured and being fully paid for, using our tax but exclusively to the benefit and undue advantage of the ruling Democratic Progressive Party (DPP) to retain power.

What will suffer instead in the whole equation of the expenditure spree that does not have reciprocal revenue base are not the chiefs, who will get their pay on time, but social services. Hospitals will have no drugs, schools will have no necessities and the list goes on.

As for the private sector, which is the cash cow from which government collects its taxes, it has been left out in the cold.

Reacting to the budget on Friday, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) CEO Chancellor Kaferapanjira described it as a pure waste of time for the same reason that the private sector has been left out to hang.

There are no incentives for the private sector and the Finance Minister has simply glossed over perennial problems that dog it such as energy problems, saying he sees 2021 as the year when Malawi will have no blackouts after tapping power from Zambia and Mozambique.

But, somehow and somewhere, Gondwe is aware that the private sector will not tick and he has made it clear he is going to borrow heavily to the tune of K242 billion from the market for consumption, crowding out the same money that private sector is supposed to borrow to produce.

In conclusion, this is a budget that has got one aim, which is to propel the DPP back to power.

Anything else is of secondary importance which is recklessness that we will be accustomed to for the next 12 month.

Whichever government comes to power will have to start from scratch as, at the moment, the DPP is in spending mode, unfortunately, using money it does not have.

The next 12 months will go to waste.

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