BUDGET: RELIEF OR BURDEN?

FINANCE Minister Martin Dlamini’s budget speech takes centre stage today but he walks into Parliament chambers with very little to count as successes over the current financial year.

He failed our delivery on promises test scoring a measly 35 per cent success rate, with a particularly dismal performance in the implementation of the drought mitigation plan that has resulted in a 15 per cent electricity hike for the consumer.

Technically, we are paying for his failure to grant SEC the E80 million it needed to avoid this and ensure it reduces its administration costs which rose by 33 per cent, to ensure it deserved it. How he plans to balance the books to fix this mess is what we are all eager to hear today.

We do recall how the minister started fumbling way before tabling the current budget this time last year. He failed to involve the Finance Portfolio Committee prior to the tabling of the national budget and was embarrassingly forced to postpone it for a week. This time around, the minister seems to have corrected his mistake and engaged the portfolio committee.

The portfolio committee members were evidently pleased about this that they couldn’t hold back blurting out a proposed E400 elderly grant the minister is expected to announce in response to a directive from His Majesty the King, to increase the meagre E240 monthly award. This development, preceding an election, will most certainly see a speedy debate of the national budget in the House of Assembly. 

Should we read into these two positive indicators to look forward to a minister determined to correct his mistakes and score high on delivery? Unfortunately, our minister has taught us never to trust him because he says all the right things but does the direct opposite.

Just this week we are told there is a new parastatal being formed much against the minister’s call for a reduction of the now 49 parastatals, 29 of which rely entirely on government subventions.

This also reminds one of the minister’s call to reduce spending on non-priority items, only for his ministry to tell stakeholders that this was not possible midway through the year. Not to mention ballooning the spending on salaries contrary to expert advice and logic.

We’ve also seen a continued increase in spending on the security forces for our very peaceful country, yet this is one area we should be making huge savings. The most embarrassing is funding an airline without a feasibility document to justify its viability in the midst of a declining aviation industry across the continent.

At the rate things are going, the minister is a few months away from ending his tenure as probably the worst performing Finance minister in recent history. The business community is very unhappy at how he is managing the finances because many are ‘punished’ with prolonged non-payment for doing business with government.

His counterpart in South Africa, Pravin Gordhan, delivered a ‘taxing’ budget that left high earners sulking as our neighbours desperately need more billions of Rands to increase expenditure on education, health, infrastructure and social services.

A higher fuel levy and between a six to 10 per cent tax increase on sin tax were also announced, which are almost certain to hit our pockets as major importers of South African manufactured goods. The question is by how much?

The much anticipated introduction of sugar tax was put on hold pending consultation. So was the increase in VAT, both of which could have a huge impact on the local economy and it will be interesting to hear what our minister has planned for these possible developments.

Swaziland is also desperate for money as suggested by a recent letter to SACU requesting for more billions. Desperate attempts to raise bonds have not yielded the desired results, leaving the minister frustrated at failing to finance the E7 billion shortfall he announced last year.
Most important to note is that the projected economic growth rate for South Africa still falls below two per cent, at 1.3 per cent in 2017 from 0.5 per cent in 2016.  As a former Central Bank governor who knows exactly what this means for Swaziland’s growth prospects, we trust he has done his homework to produce a high score on delivery to save our economy from admission into the Intensive Care Unit (ICU). The good news is, we have good doctors to get us out of it, but only if we heed their advice.

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