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HAS GOVT GOT NO MERCY?

07/03/2018 03:11:00 By Thabiso Dlamini

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If you haven’t been paying attention, everyone is up in arms denouncing government’s ‘umhlolo’ budget. The problem with this 2018/19 budget is that it is hell-bent on making life very difficult by taxing every movement of the ordinary Swazi in a bid to increase government revenue to E16.7 billion.

One of the abhorrent revenue generating policies to be implemented by government this year is the value added tax (VAT) on electricity on top of increasing the VAT standard rate from 14 per cent to 15 per cent to align the country with the mighty next door neighbour, South Africa. With the E16.7 billion that government wants to cash in on this year will definitely see many of our wallets run dry, and still government will be running on a E21.6 billion total expenditure translating to a E4.9 billion deficit. However, though the deficit is important, it is not the point I want to make today.

Government can easily issue out bonds in the money markets, among other domestic and international debt management measures, to address the revenue shortfall.
What is really the point of contention with the 2018/19 budget is that most of the people in Swaziland will find themselves with less money in their pockets owing to a government that keeps taking and taxing every bit of our daily lives to fund things that are of no use to the average Swazi. The amount of disposable income for the average Swazi will definitely diminish yet the economy is predominantly driven by consumer spending. For example, in the USA, consumer spending accounts for about 70 per cent of all economic growth in that country.

The point is very simple here: if people have less money in their pockets, who will buy from the shops and businesses that we so want to revive in our economy? If it is going to be a struggle to afford the basics of life such as electricity, and if all goods and services in the country are going to incur a VAT spike, that is, a one per cent price increase, then disposable personal incomes will decrease, the ratio of household debt to our gross domestic product (GDP) will increase and shrink economic activities because we simply will not afford to buy or do anything in Swaziland.

It would be a different story if government was taxing us to give us food, to guarantee tertiary education for every high school graduate, and to provide a state of art health care system in Swaziland. Instead, well over half of the revenue generated (upwards of E7 billion) goes into financing the civil service wage bill. Basically, government collects a lot of money from struggling Swazis, half of which goes to pay civil servants who do not really add any value to the economy. If you are not convinced with this point, just think about how long it takes to get a personal identification number in Swaziland? How long does it take to see a doctor in our government hospitals? The point of having a government is so that it can intervene in the economy to produce a rapid but steady rise in the volume of goods and services produced from year to year while raising the standard of living for all its people.

If we do not have money, who will afford to use the newly built international airport at Sikhuphe? Who will be using the five-star hotel in Swaziland if most Swazis have no money to spare? Most of the time, it is government officials, the one per cent of our country, that takes off and lands at the newly-built Sikhuphe airport while a majority of Swazis opt for kombi shuttles to Johannesburg, thanks to the very expensive air-travel services in Swaziland.

The way government is going about squeezing every cent from the ordinary Swazi’s wallet, the majority of Swazis can just forget about ever enjoying the amenities of the five-star hotel in Ezulwini. No, in fact flying and the five-star hotels are luxuries meant for tourists and the cream of our society. For the basics such as affording a house or rent, the Swaziland National Housing Board is also making sure that middle-income Swazis can forget about 15 per cent of their disposable incomes as SNHB has effected a 15 per cent hike on rent at Mobeni flats.What kind of precedence is this government institution (parastatal) setting for other landlords in the country? What’s the SNHB got to do with the national budget and government spending, you may be wondering? It is all related; if all the social institutions like SNHB, Swaziland Electricity Company, and Swaziland Water Services Corporation, among others, do not receive their fair share from the g-wallet, they in turn start squeezing consumers’ wallets.

Government cannot keep taxing us to infinity because it affects our ability and motivation to wake up every morning and go to work. It affects our ability to save and invest, and it affects the healthy hustle and bustle of the economy. If there is no money, we all suffer, government included. Enough is enough!