Letfu Sonkhe Analysis On Finance Minister’s Budget || Courtesy Of Swaziland News

Yes, So today the institute for strategic thinking and alternative point. So what budget eh Yanil and eh we have economists in our midst. We have activists in our midst. Eh who are going to be sharing reflections and perspectives. Budget like presentile minister. with with Minister Neil and what are the implications for the ordinary Swazi and the economy of the country? I'll be the co-host with the who will be joining us shortly. Uh our panelists will have 10 minutes, 10 minutes of presenting. eh we have ah about six of them. And six less amongst them there's Comrade Thembinkosi Lamin who will be the first one to speak. Uh Themgosi Lamini is a is chair of Publish What You Pay South Africa. Climate Justice Lead at Oxfam South Africa. As former Problems Manager at Amnesty International South Africa. As senior technical adviser. Uh South African National Treasury. Is also senior researcher Idasa is an economist for Congo. His finance officer for Iswazan Ministry of Finance. Uh he has an LLM in international taxation from the University of Sydney, Australia.

As BSC in architectural economics and management from Liang Compass University of Swatini, formerly known as University of Swaziland. Uh usually analyses policies and budgets. Tax policy adviser and all matters in mining, destructives and community rights. So because we have six were marked presenters. I will we will introduce Lalabane Gangane as they come in. So now before Comrade Thabile would be the third one so we'll introduce speakers as they come. So now I just introduce Comrade Themkos Lamini. Uh the flow is yours Ngosi and you will have like 10 minutes to share your perspectives. Implications budget. Present Leona. Uh few weeks back. The flow is yours. Yes sir. Thank you so much. Um I'm excited be part of this auspicious gathering today to discuss the budget of a Swatili. I think there are three things that we usually look at when we are looking at a budget. Uh the first one is allocative efficiency. Which just looks at how the budget is allocated according to the priorities of the nation.

Uh today. Um because there is a tendency with governments. to allocate the budget in such a way that it responds to the whims of those who are in power at that time. And ignoring the needs of the nation in general. Uh the second element is the question of expenditure efficiency. Uh where we try to look at to what extent is the money allocated for the public good. Used only for the public good. Uh in that we just look at the issue of saying if we decide that we are going to buy pencils for primary school going children.

We don't want to find a situation where we buy each pencil for 10 Malang where a pencil costs one Lilangele at the shops. Um so how we are able to measure that in the budget. Is when we look at the auditor general's report. Which is present as one of the eight key documents that are presented together with the budget. So when you look at the auditor general's report it will tell you how the budget accounting officers have been able to use the public coffers in an appropriate manner, in a manner as is stated in the legislation, such as the Public Finance Management Act, which by and large says how government moneys should be used to exclude issues of personal interest. So where the auditor general's report say a lot of things about wasteful and fruitless expenditure, cases of fraud, cases of unfinished product projects where money have been paid out. Then we make a determination to say the expenditure was not efficient. The third item that we look at is the question of fiscal discipline.

Where we look at the extent to which those who are creating the budget, they look at the issues of macroeconomic fundamental. Such as how the budget is going to contribute to issues of inflation. Wherein for instance you find that the budget has got a huge budget deficit which is the difference between the expected revenue to be collected and the expected expenditure at the end of the financial year. Then we worry because it means that particular budget is going to spare inflation. Where we know that inflation is taxed on the poorer citizens of the country. Um inflation shows up in many ways. But in simple terms, where you have situations where Immediately after the budget, some prices of key commodities, especially commodities that the poor rely on, to fill their stomach, even if it's not, of not much nutritional value such as bread, then you, you need to get worried. Uh, when fuel increases, it increases the cost of going to work. when fuel increases, it increases the cost of doing business. It increases the cost of producing key commodities.

And as such the price of fuel is then passed through to consumers. And as a result you find that even if you have a situation where you had a stable income you find that you are struggling overall. So in terms of this presentation I wanted to not just look at the value figures that have been presented by Minister Neil in the budget. But to sort of look into the documentation that is presented by the minister as part of the budget process. The documentation that is presented in a Swatini to the parliament is so poor such that it is even difficult to make sense of the information that is given out there. The challenge with poor information is that even parliament or citizens, especially parliamentarians who have a key role of scrutiny and oversight of the budget.

They are not able to play that role effectively. Simply because the figures that are presented to them, they mean so lately. Uh and of course what you see is that with the government is business as usual, there is no indication whatsoever that this government is following certain policy positions that have been put in place in terms of poverty alleviation, employment, creation, and also the question of addressing inequality as it is. So when they approve the budget, therefore, it means they play a role of rubber stamping because the information that is there is so poor. There is a lot of detail that is hidden when the information is poor. In I wouldn't say that the parliament of a Swatini has any particular role in the budget given the, the, level of information that is given.

Um, if you want to have a proper public finance management system, that can deliver good news to the citizens. You need to improve the quality of information that is given. The information should not just have a lump of figure us. But it should also have narrative explanation of the various programmes of the government That they are putting in place in order to to deliver on their rights obligations. Not only are these narrative explanation about what the government plans are.

It should also talk about the past performance of the government in terms of delivering on the things that they have promised in previous budgets. These narrative explanations should be accompanied by quantitative non-financial information. For instance in a budget we should be in a position to know how many children are benefiting from the free primary education. We should be in a position to know how many elderly are benefiting from the elderly grants. We need to know how many people are passing through our public hospital system. Uh and whether those people are being assisted. We know that there has been numerous reports of drug stalk outs in our hospitals and clinics.

And the infrastructure and facilities has deteriorated. It has not been maintained. The equipment is not serviced adequately for the citizens to enjoy their right to health as it is. But if we look at the quality of information that is given in the budget. It is not adequate to tell us what the government is doing on a day to day basis. For us to form a view about whether the budget that is being given out is of importance to the citizens overall So there has been number of attempts to reform the Swadini Public Finance Management System. Hence you've seen now documents such as the budget as a glance at a glance which is presented by Minister Neil to accompany the budget documentation. The budget has a at a glance document is a good document in essence because it is the document that has an ability to explain in simple terms the social contract between the state and the citizens. And tell the citizens what exactly is happening here. But when I look at the budget at the grants document itself it has a number of witnesses. For instance we know that we are now using the medium term expenditure framework.

These framework says that when you present a budget you are going to put the budget proposal for the current financial year. Uh tell us has happened in the past 2 years. In terms of an actual for the first year. last year, an estimate and then two outer years. Which then tells us what is going to be happening in the country in the next two years.

Uh in broad terms. So that we know as citizens where are the policy priorities? What direction is the country taking? Where is the country going to put most of its expendi now in the absence of this information in summary format, it is difficult therefore for the citizen to say that they have been given something in the budget. What we see obviously is that there are no much in terms of increments data presented in the budget in terms of the per capita grant for free primary education. So the question of free primary education is one of the issues that are problematic with this budget. Because since inception the free primary education per capita grant has been placed at the same level.

We all know what has been happening in terms of inflation. Uh which means that what the grant used to pay for at inception. It is now only able to pay a fraction of that. So the result of that is that even as the budget will show that so many the lions chair of the budget goes to education But it can only afford us poor quality education because of the budget itself is not based on the principles upon which a national budget should be based in terms of eh periodic adjustments eh to the per capita grants for free primary education for elderly grants for people with disabilities. Overall not only is this budget contributing to a deterior situation and as far as education is concerned. We see that conspicuously missing in this budget are specific allocations to people in the periphery such as people living with disabilities. If you go to Saint Joseph's for instance or the school for the deaf, you will find that the situation there is so dire in terms of the absence of resources to ensure that those facilities can function appropriately and they can at least assist our people living with dis to lead normal lives.

And to be able to go and pursue opportunities for further education even outside the country once they complete their education. So to the extent that this budget is not taking care of the poor, marginalised, people with disabilities. It is not a budget in the good interest of the citizens of the country. So it is not a pro poor budget because it has not despite so many requests by the citizens to increase the elderly grants even this financial year. We don't see that. What we see is a bulk of the budget especially the capital budget going to infrastructure development where we know that it will go to the ICC fish projects. Uh interchange in Manzini tours which are favoured by the powerful people of this country. For some reason other than that these projects are going to serve the majority of the people. So in essence where we do not have essential medication in our hospitals. And money is spent on aeroplanes. Uh ICC fish. Where we know that the future of the aviation industry in is in a state of flux.

The future of the hospitality industry including conferencing is not likely going back to be in the pre-covid-nineteen levels. Then we do know that these budgets that have been allocated by Minister Neil into Vanity projects are unlikely going to bring a return on investment to the nation. So in conclusion I would like to speak a little bit about the question of the proposal of the minister to increase the top marginal rate for tax.

When you increase the top marginal rate for tax, you spare a situation whereby you are reducing consumption. When you reduce consumption of households, you are also in a way now constraining economic growth as it is. Because people as human agents, they behave in a certain way. When you increase their incomes then you decrease their level of ability to consume. So that is why this budget is such a bad bad idea for the ordinary Swazi. It will impoverish the was not only those who are income earning but also those who are trying life out there in business because people will be having less and less disposable income in their hands to be able to chase the goods that are there in the market. Uh thank you for that. I will end. Thank thank you very much Mkosi. Uh at this moment we will have Nosi coming in to take over the and continue with the discussion. Join now we are hosted by Lettu Songe Institute of Strategic Thinking and Development. Uh we are unpacking a budget. Ja. Minister of Finance from Swadi. Uh go ahead Proceed. Thank thank you so much comrade and good evening everyone.

My apologies for being a little bit late. I'm two hours behind your time. Um and that's that's that's always an issue. Theme goes scary as it is but it that was very informative and very educational. I have a few questions for you but because of time I'm just going to take opportunity to introduce them our second speaker. Um who doesn't need a a massive introduction really. Um he is one of our members He holds a master's degree or in in commerce and currently completing his PHD. And he works as in as an academic and is affiliated with a a different number of universities in in in South Africa. Mister Mathebula Carmen Mkolongenga is is Katsi. We just going to try and be precise but rush everything. I welcome Mister Matshebula Nyabolo. Okay. Um evening in Busele Maswati. Well after Themikosi's presentation, I've, I wouldn't think I have much to add, except as to more of emphasise on, on some of the factors that he has touched on.

And I would try to be brief and, and, and dive straight to, to what I, I viewed in, when I dipped into the, into the budget. So the overall, overall picture that I saw here, indicates that the minister is basically in on pursuing an unsustainable physical consideration path. Instead of focusing on a pro-growth macroeconomics. So this is especially considering the fact that the the economy was hit. Uh rather there were economic hits the country has endured from the COVID-19 pandemic. As well as the political unrest of the of the last year June events that we saw. So this kind of approach that is taking could really come at the expense of the immediate well-being of the general people in the country. So the few things that I will add on. It's basically matters on the health. Budget, the education budget. labour and social protection which I think are very crucial to a developing economy like, like, like Swaziland. I will also look at the obvious factors such as the tax the tax stance that the, the minister took, as well as the exhibitant allocation of the security cluster budget.

So to start with the health, portfolio. What I realise is that the cut the cut in the healthcare is, is, is quite alarming, especially since we in the middle of a pandemic. As well as the huge stress of the already wanting health system, or other health services that the countries face with, as well as, the fact that the, there isn't enough that the the health system can offer. So one would have expected a significant increase in the healthcare expenditure to absorb these shocks. Especially considering the considering that the health system of the country was already poor. With declining in large shortages of medicines. And and clinics and hospitals. And it was already facing a high prevalence of HIV rate. And The healthcare budget was basically declined from twenty 2. 8 billion I believe. Uh to 2. 4 billion in this financial year. So between the two financial years there was a decline of about 400 million or so. So this is quite surprising considering the fact that we're in a middle of a of a pandemic.

As well as the fact that the there's already shortages in in in our in our healthcare system. And it's also worrisome because we also see that most of the key people in the economy don't usually when whenever they need medical health services they usually find it worthy to go to South Africa to to get care there. So this is a clear indication that there's a there's a wanting healthcare system in Swaziland.

And this to be addressed. So the second cluster that I looked at was the education cluster. So while the minister acknowledges the substantial increase in learner enrollment. The budget alloc for the ministry of of education for the twenty twenty-two, 2023 financial year. Stays the same as that that of the previous year at three pointfive billion. So so with the education system struggling to get back on its feet following the chaos of the pandemic at the political unrest. Keeping the funding unchanged will only disadvantage learners and the system even further. While also resulting to fewer teachers and and and increased in class sizes. So in my view we would have expected an increase in the in the education cluster as well.

There's also an issue in the in the labour. So despite the high rising of unemployment rates in the country, particularly amongst the youth. There is no clear creation of or creation strategy or job creation strategy indicated in the budget. Furthermore the budget only allocates four hundred and thirty-nine million to the ministry of labour. And as in social security. This proves that this is a cluster that is rather abundant. So the third cluster that I looked at was that of a social of the social protection.

So in this financial year the government has allocated about seven hundred and sixty-two million. To social protection from seven hundred and forty-six million in the previous financial year. So this unsustain unsubstantial change come despite a significant increase in enrollment of children at high school who are funded by the OOVC fund. Provided for in this budget. As it stands, nearly 51% of high school children enrolled under this this fund.

Uh therefore, this budget is expected to improve the lives. It also improves. It's it's expected it's also expected to improve the lives of about 75000 elderly persons who are growing at an average of one thousand eight 881 per year. So considering that 69% of of this MSID population is below poverty. Such social protection budget is is rather a mockery to the people of the country. So this I think is it's one cluster that Mister Glamini covered in detail. So one thing that is not easy to miss is that of the of the taxis. So the tax indicates that the rich are to be subsidised by the poor. So the tax increase will definitely hit hard on the working class especially and the poor. So in a country where seventy of the population lives below poverty like below the poverty line. So using tax as a as means or as means to close the inequality gap.

Only makes matters worse. Especially when done in this fashion. So the minister increases an already high pays you earn income. Pay pays you earn income tax. By 3% from 33% to 36% for income earners above three hundred thousand. To close income inequality gap. So this is rather reckless and and will not benefit the poor. So taxing 4004000 income earners who are already paying tax. And who are already paying VAT. and impacted by the rapidly increasing standard of living. It's plainly deliberately perpetuating poverty in the country. So my recommendation in that is that the government must lift the tax market where one starts paying tax to at least double what it is it is now. And and increase the pay as you earn tax at a diminishing rate. As opposed to such a such a a 3% jump in in an instant manner. So the last thing that I realised or rather looked at is that of the security of the security cluster budget. So in my view the exorbitant budget allocated to this to to the national to the national security. It's alarming. This shows that it shows signs of a government preparing for for a war or something because why would you want to have a security cluster or rather a cluster of of such having the largest proportion of of the budget as opposed to the other developmental portfolios.

So it is clear that the government is highly dependent on security. Or the army to for the army forced to stay in power. Especially when when we compare this budget to to to that of other key developing portfolios. So in my in concluding I would think that Swapini being a developing state as it is. A budget of such an economy must be one that is characterised by indication of a strong a strong state intervention or government intervention. So the government must be the one that plays a key role in ensuring that our development or rather the development or rather will be the should be the key driver of the development. And not drive the responsibility ability to to the private sector. And proposing that the youth should rather be used the little that they have to be to start small business. I will thanks thanks for your time. Thank you so much eh I I have a comments. So I'm going to do my best now. I'm good to see Sibiseletin. I have a lot of questions cutting. I will just note them down and hopefully we'll we'll find time. Um Before our next speaker.

Uh who one of our members Karen running MP Mabe Khumalo. Mdunga Stella and just give us your take How do you feel and implications of my sister? Um numbers I would say. They would see seem independently. in the sense that not to say budget. This has been the the problem for decades. And in each and every parliament that is the issue. How how how is the formulated. From the government it apparents budget. Issues. I think what are the issues? Year in, year out. Central Bank every year. They're looking at that belated as it is. Grassroots. social programmes. Because it is lacking. Social programmes would say wide. Prominence. In terms in financial terms. Uh panelists Naola, passed. Because for obvious reasons. And then it's even worse. Because Ukraine, Russia. Uh with the increase of fuel almost every week. So inflation rate rates fuel.

Taxation. The 36%. It's parliament. Uh The maximum income tax rate is sitting at 25percent. Oh 30%. That's the maximum rate. Uh Mozambique. 32%. Already were sitting at 33%. So now thirty-seven . Percent. Income tax. Na Already full of fuel. But increase. I want to believe parliament. Or maybe the other day. They discussed increase. So That is the question because revenue basically is not wide. Now the problem. The source of revenue. taxation. Now in the periphery Um structures. Economic science Uh that is why because Now Bugale Male moderate. Language in Ebuto Soloyat Kubega. Speakers on the line. So Songable. treasurer with federation. First Deputy General Secretary where which is the second largest trade union in Swaziland. Um Thabileke Askalibu Mona Mo Nyonyanethebase Bendi, Ugele Siatu, Sugeile Wazamalaza. So Comrade Thabile Nganga Manwe. It's in Imovole. Come on. Um they are present home minister a a cabinet a parliament. Um the previous speakers.

Um minister. so a benefit directly. Uh still allocations Very low. Or locations are education. Sectors now. Evan. below the poverty line. Believe. Um my colleagues have touched on some areas of the budget. I will also touch on three or four issues. Hector less interest inflation. Cost of living. Um inflation. Ja. But other prioritise. In the sense that the cost of living that has been granted or afforded to 8017.

It has always been below the inflation rate. Uh the recent past. Um hê experience can can attest to that. They've always been getting a a cost of living. That doesn't match the prevailing inflation range. Um workers. salaries they continue to be eroded. They say buying power affected. Uh the very same government or MR employers. They then delay logo I implement Review. Workers will be improved. Uh ongoing. cost of living. Um budget. Allocation. Ja some of the processes. Assistable improver. Workers. Um particularly the issue. A cost of living. Near review. Is that allocations budget? They remain very low. Such that they won't even meet the desired outcomes of the processes they are intended for. If you look at $220 million and 15 million for cost of living and the implementation of the salary review process. You know they're not going to meet what we we intend to achieve. Out of that process. Um which is of interest to the workers is that Na my workers Survivor. Financial issues.

Um that's how civil servants or most of the workers in the country live Uh we have seen an increase prime lending rate. Lesoge 7. 2 5. Seven point five. MI Institutions. Um are now also going to go deeper into the pockets of the workers. Ganzima workers loans. Which then creates a burden also to the workers who are expected to to pay an increase. Um interest. Le ND where increase at the the prime lending rate. also of interest that we noted is that government is also intending to decrease e-wage billion Why Kulmesa at 1.

7%. Um one is wondering decrease bill. Treasure. Uh So as protect is the biggest employer of wage bill. Um in a effect service deliver. I see go efficient at the moment looking at how the services are being offered by by the government. Increaser privatisation. Where services are going to be expensive to the ordinary citizens. So song has cuts are provide a service to a citizens at a very affordable or minimum eh at a a minimum eh basis. So decrease our wage bills.

Services. Private solutions. Decreaser. It basically means you are laying off people or privatising some institutions because you don't want to to increase or to pay more as a government. You'll rather give it to private solutions or or create my parastatals. So we we see that because it will also increase issues unemployment that you are trying to fight as a country at the moment. And also the the issue had decreased at the wage bill will also affect the workers. Who are already there in the system currently. Because Lama workers are already overburdened. Which a lot of work the government not eh filling up rather can post and eh the the workers are not being compensated for the work. Eh who wishes an overburden. Um and my colleagues have touched a march on the issue of tax. But I'll also want to highlight a few things. Eh issue attacks. Sibu na yung increase. Um it's for the upper bracket or high earners. Uh the increase tax in with regards to a PSUM. The decrease. corporate tax which is company tax. For us we see but decreased in her corporate tax. They are trying attract foreign direct investment.

And we don't want to believe that is correct. Because we believe if it was meant to attract a foreign direct investment. It was going to be made for new. eh investors who are going to be coming in. Not for local eh businesses that are already in operation. So we we see this as an intention by the elite or business owners. Who are apparently will say the minister himself is a business player. So the minister being a business player will want something that will benefit himself and his friends.

So by the decrees of the corporate checks and increasing. He pays you earn. We see that they are trying to close a gap. At the expense of the workers who will now fill the gap by the the increasing that they are making in the pays you earn. In the sense that attractor professionals because eh you wouldn't want to work in a country where you are being taxed to the bond. Eh eh will continue to go and work in the diaspora because that's where they benefit. Eh if you people, local To a larger extent is that and also create we know we live in a country where unemployment is very high.

And the fact that eh the high earners are also able to assist in employing some of our people at home. EG domestic workers. So people will now want to focus on our rather not have a domestic worker and have other means of her gathering and assisting and home. So it means we are in in a way creating unemployment. Opportunities for other people. Um I think also Themgosi touched on issue. Independence. Um the family dependents. The issue unemployment has created that it it dependency level at family level. It it it is always attached on the breadwinner or the one that is working. So if you in it takes. It means tax. at at a family level. So tax. Because Imani should be kept within the pockets of the workers. So that Lema workers or the citizens Lemali. So that it grows the economy of the country. Understanding at least that when money is being spent. And when money is given to support a small business enterprises. That's how the economy of the country is going to Leslie Eche will be to highlight on issues of eh the sectors.

That we believe should be given a priority. Issue of health and education. We see there has not been a significant increase in their allocations. And then one wonders we have seen the effects of COVID on our health system. Our health system is is collapsing. Eh there is there are no trucks in hospitals. Eh equipment eh is not being serviced or air equipment is not available in hospitals.

But you see minister that has not increased a budget for the health. And is is only focusing on increase security forces or the security of the country and then you ask yourself how then do you prioritise your citizens in the country. So we have also seen the effects of COVID on our education system. Education should have been allocated at least a higher allocation according to understanding because now we are going into e-learning programmes. For us to be effective in education and our youth to participate fully and benefit from the education system. We ought as a country to get into a serious prioritise by government. But we haven't seen much of an allocation directed towards that route. Sibonile the the previous months. education conclude love and minister Towards Emma Policies. Lasharabo IMF Nabo World Bank. Who promote privatise who are exploited. So we don't as a workers from a workers perspective. We don't think that we are going to benefit anything from from such a budget and we want to encourage SASS.

That as people who are supposed to FH from the economy that we make. We ought to fight for what we believe in. The things are not going to change. We need to participate as Swazis. Rightfully mentioned what are the processes that are being followed? So as far as we must also contribute so that areas edge of focus. They should be given a priority. I also given a priority. So we want accountability at the end of the day from the government and service delivery from the government. And it can only be achieved.

If a Maswadi, Atao, We want an accountable government. Eh of the people. Because you see this is eh what we wanted to share and highlight to Before personal thank you note. It's so refreshing. Parliament. Um because eish. Representing unfortunately. Maybe this is in the right platform for me to say that but I will say it anyway. MP. Public. Because not the ordinary I presume Peggy Mamba, Lo, Peggy Mamba, He is the current president One of our activists Nje Eswatini Trade Trade Unionist or law all over the place.

Health and national Nyagu Nagu International positions. Mangabe already place the mic is yours. Thank you very much chair. Can you assist me because Okay. Okay, thank you very much chair. Uh comrade Uh scholarship. Intention. The good developer. Skills. Uh in the country. So Moba Minister. Budget. Allocation. in the country political crisis. But allocator dialogue format. Uh very brief. It was aspect so the years. Opened transparently. But the problem then means is that the eh from a point of view of the MSF. There can only be one solution To galvanise the people. To ensure those women Sensitive. Uh ordinary in in understand the budget should I be concerned? in short and in basic. Lina more into the politician side of things. Um right now Swatini. What would you do different economic growth. Eradicator poverty. I'm trying so hard to stick to Siswati. But I'm sure anybody Mike Njet. 2 minutes child. Um budget a political statement. Now budget Makaya. Facebook. Uh typically a high net worth individuals. M They have a nine to six or nine to five job call. But business. Uh Tax Havens. Jurisdiction. Evan. Uh now Lockshot pay as you earn.

what we deem to be a immigrant class. Working class inequality Effective items. Company income tax. now tax alumni at the marginal tax rate. Security law. expenses so that 36% law proposed. Tax base is saying overall now on average. So but delighted business. now. I text maybe I I involving passionate understanding when it comes to budget . Epe role. From a a basic human right perspective. Second. Um anything. 5 minutes. Michael my co-host Stack. He Facebook. Maybe whilst meanings and without drama Or 22 million budget.

Budget. Yes. Maya. Parliament day. 22 million. it. 22 million. Tense nosy tends to co-host panelist to from Comrades Thembinkosi to Comrade Valley. Uh to MP Babe Khumalo to Chairperson or MSF, Thulani Masego, to Comrade .

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