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Eric Bloch Column

The budget speech that wasn’t

By Eric Bloch

IT is a natural trait for most always to desire more. When life is good, they wish it better, and when it’s bad, they wish it good. And that is particularly so when an ec

onomy is in great distress, resulting in hardships for almost all, and extreme poverty, misery and life-endangerment for many.

So great has become Zimbabwe’s economic oppression that even the desire for positive change has been suppressed among many of the population who, having experienced an ever greater decline over almost 10 years, believe that poverty is now endemic and cannot be reversed, but can only intensify.

Nevertheless, some remain with eternal hope and expectation, aware that ever since creation there has always been evolution and change, albeit sometimes inordinately slowly.

In Zimbabwe, that hope and expectation has been particularly pronounced ahead of the annual budget statement in recent years because the state of the economy has been so horrendous that the yearning for change has intensified exponentially, and there is deep-seated belief that the budget is potentially the greatest catalyst for such change.

Imagine the nationwide joy and excitement that would have characterised hearing the Minister of Finance, Herbert Murerwa delivering his budget statement yesterday, had he said instead of that which he did say: “Albeit belatedly, government has recognised that the dismal economic circumstances afflicting Zimbabwe were not, as it has been believed until now, occasioned by Tony Blair, George Bush, the European Union, sanctions (illegal or otherwise), white farmers, industrialists, retailers, the political opposition, or the independent media. Government has now realised that, in fact, it has been its own policies, its policy inconsistencies, and its blatant disregard for well-intentioned sound advice, that has caused the cataclysmic collapse of the economy!

“And, believe it or not, as government’s second-greatest wish is to achieve well-being for all, it is determined upon achieving essential change, even if transformation requires diametrically different policies than heretofore (of course, government’s greatest wish is to survive, in power, intact and free, with unhindered power and wealth!).

“Therefore, your government has devised new economic policies, which it is going to implement forthwith, determinedly and dynamically, bringing about the greatly overdue metamorphosis. Key to those polices are:

* Immediately, government is going to deregulate the economy, allowing it to be driven by market forces, which have been recurrently proven, in every one of the world’s successful economies, to be the only forces that actually work. Hereinafter, government will only regulate the economy to the extent necessary for national security (such as control on the production of nuclear weapons!), for national health, and for the preservation of national moral well-being. In all other respects, the economy will drive itself, steered by its operators, save that in order that there will be a sufficiency of market forces, government will vigorously stimulate and incentivise competition;

* As it is critical that government lives within its means, and thereby not be the trigger of ongoing, soaring hyperinflation, it has decided that it must immediately cut its spending, which has been grossly excessive, and often misdirected, for many years, and that that cut must be of very great substance. This is to be achieved in many ways. First and foremost, it is time that we recognise that the only war in which Zimbabwe is engaged is an economic one, and therefore we do not need the continuing gargantuan defence expenditures to which we have resorted for years. Forthwith, we will not purchase any further fighter aircraft, which fulfill no purposes other than image-building, prestige and self-edification, mainly by use in dramatic fly-pasts on national occasions. Moreover, we will sell some of those that we already have. In like vein, we will cutback heavily on other equipment and ordnance purchases. And, progressively, through natural attrition, we will reduce the numbers in the armed forces;

* Moreover, in order to win one of the economic battles, we will use our capable forces on economically constructive infrastructural development, desolated land reclamation, and the like;

* Government has become aware that much of its expenditure is as a result of massively widespread corruption, involving the misuse of state assets, misappropriation of state services, inflated prices on governmental procurement, and numerous similar actions. With immediate effect, government will cease talking about containing corruption, and will now energetically fight it at all levels, without fear or favour, and unhindered. Prosecutions and dismissals will become the order of the day;

* Further, to reduce the costs of government, His Excellency the president has agreed that the size of government be considerably reduced, with the number of ministers and deputy ministers being halved forthwith, and a corresponding reduction in the behemoth infrastructures of the ministries. In addition, only those with requisite skills and willingness to use them constructively will be accorded ministerial office. Others, irrespective of how well they may be politically connected, will not be active in the transformed government which is to restore Zimbabwe’s economic fortunes;

* Hand in hand with the cost-reduction measures, government is determined that from now on the long underpaid public service should be properly remunerated on a market-related basis but doing so shall be directly inter-related with the civil servants giving market-related services. Salaries will be aligned with the private sector, both as to quantum and as to performance. Those that do not perform will forfeit their employment and that, combined with natural attrition, will soon markedly reduce the gargantuan size of the public service;

* With the further intent of substantial expenditure reduction, international and regional travel by persons at all levels of government is to be rigidly curbed. Not only will travel be stringently contained to the absolute essential, instead of prestige building and self-enjoyment, but the sizes of delegations will be markedly reduced, and all travel will be on commercial airlines, instead of chartered, exclusive flights.

* Government has long talked of total or partial privatisation of parastatals and their alignment with appropriate strategic partners. With a few exceptions, government has resorted only to talk, and not action, resulting in economically destructive parastatal inefficiencies and incompetencies, and even more fiscal burdens upon the state. It is time — nay, it is overdue — for action instead of talk. Government has therefore decided to privatise the parastatals by immediately handing over to leading private sector business, financial and management consultants, the mandates to restructure and dispose of parastatals, in whole or in part;

* However, of the few costs which government must allow increase, one is the cost of tax collection. Progressively, the state has abdicated responsibility of gathering — in taxes to the private sector. It is that sector that now collects employment-related income tax, through PAYE, collects VAT, withholds taxes on dividends, interest, various payments to non-residents, transactions with parties without Tax Clearance (ITF263) and much else. The private sector not only does so without recompense, but also is subject to punitive penalties and interest when in default. And the costs to the private sector as governmental tax-collectors are great, with consequential negative economic repercussions. Hereinafter, in recognition that the labourer is worthy of his hire, the private sector will be fairly compensated;

Of course, such a budget speech was, and is, naught but wishful thinking!

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