Zimbabwe MP says scrap allowances for civil servants and increase their salaries to earn more revenue

Full contribution

HON. CROSS: The half yearly review of the performance of the Budget by the Minister last week was a very important occasion for the House. It gave us an opportunity to review what Government has been doing with our resources in the past six months. For me, the most important feature of the Budget was the very substantial budget deficit in 2016. At the beginning of 2016, we started out with an approved Budget which provided for a deficit in the Budget of $140m. The final outturn was $1.4bn. Mr. Speaker Sir,  that is equivalent to 30 per cent of the Budget. I believe that the IMF guidelines provide for a maximum of 5 per cent. It points out to the fact that we are so far outside…

THE HON. SPEAKER: Order! Hon. Member, I hesitate to send any Hon. Member outside. I repeat at the back there, can you hold your own and listen please.

 HON. CROSS: We are so far outside the parameters indicated to us by the IMF during the reengagement process that I cannot help but come to the conclusion that this process is virtually dead.

Of great concern is that we started 2017 with a projected budget deficit of $400m and in fact, we now believe that it will exceed US$1, 6 billion.  This relates to a whole lot of unbudgeted expenditure, over expenditure in certain particular special areas.  Mr. Speaker we cannot go on spending money recklessly like this. In fact, this brings back memories of the situation in 2007/2008 when the Reserve Bank, using its unauthorized rights as a quasi fiscal agency of Government, was printing money in order to finance a massive Government deficit and to try and keep the economy going.  The consequences of that were the total destruction of our Zimbabwe dollar, of all savings in the country for more than a hundred years and the closure of the majority of our industries.

 Mr. Speaker, whether we like it or not, we are going back to 2008.  The consequences are that, if we are not careful, we will face a similar collapse in the country if we do not heed warnings.  The question which we are faced with as a House is what do we do, because the budget does not need tampering with, it needs major surgery?  We have to, we do not have any choice, and we have to reduce expenditure on salaries to lesser than  60% of our revenue.

Mr. Speaker, that could be achieved quite easily by simply cancelling allowances to civil servants.  In fact, if we cancel the allowances to civil servants we could increase salaries.  The reality is that allowances are not taxed, and salaries are.  This could increase the tax revenue to the State and it would bring our expenditure on personnel down below the threshold of 60%.

Mr. Speaker, in addition to this, we have to re-examine our priorities in terms of expenditure overall.  We have to recognise that we have to cut our suit to match our cloths.  This means that we have to recognise that our revenues have been running at about US$3, 5 billion and we have been spending US$4, 8 billion.  Expenditure this year could exceed US$5 billion and there is absolutely no growth in revenues.  So, in the Budget and Finance Committee of the House, we have been looking at the possibility of consolidating revenue into the Consolidated Revenue Fund, as required by the Constitution.  We have said on numerous occasions, that if we did that, it would increase revenues under the CRF to something like US$5 billion a year, because we are currently allocating through these funds which are not consolidated into the CRF, about US$850 million a year.

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