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You’ve failed, Biti tells govt

Ray Matikinye

OPPOSITION Movement for Democratic Change (MDC) secretary for economic affairs Tendai Biti was on Tuesday booted out of parliament for telling government to admit failure t

o steer the economy out of a debilitating political and economic crisis.

Not wanting to lose control, Speaker of the House, John Nkomo ordered Biti to leave the chamber just after Biti said: “I say Zanu PF has a lot to learn from the sport of boxing. When your boxer fails, you throw in your white towel to signify surrender. I say to this regime please throw in the towel.”

Biti had earlier censured government for lack of planning and economic foresight by crafting a mid-term budget that heavily taxes the poor.

Biti, the member of parliament for Harare East and the MDC’s shadow minister for finance, accused government of destroying the informal sector through its ill-conceived Operation Murambatsvina and now seeking to tax the poor through more value added tax (VAT).

Contributing to debate on the supplementary budget announced on Tuesday, Biti said government had failed and become so desperate that it had to come up with a raft of taxes that impinge on the livelihoods of the poor.

By destroying the informal sector, which he said contributed between 40% and 60% to gross domestic product, government had destroyed 60% of the economy.

“We have failed. Now we want to squeeze the little income from already suffering people of Zimbabwe,” said Biti. “What we are doing is that ‘tavakukorokoza mari’ from our own people to run the country. VAT is a direct tax that affects the poor more than it does the rich,” Biti said.

Finance minister Herbert Murerwa announced, among other revenue measures, an increase in VAT of 2,5 percentage points from 15% to 17, 5% in his $6,6 trillion mid-term supplementary budget. But he deferred reviewing individual and corporate tax bands until the national budget in 2006.

Biti said although government blamed inflation for the current economic crisis, it clearly lacked competency to craft credible development plans in which fiscal and monetary policies complement each other.

These measures are essential for developing economies in the third world countries like Zimbabwe and should deal with social formations that address structural issues of poverty and underdevelopment.

Since 1990 development blueprints have dealt with recurrent issues like inflation without touching on reasons for poverty and underdevelopment.

Biti censured government for profligacy at a time when it is in dire financial straits by creating a bloated bureaucracy. “We have created a situation where every other second person in parliament is a deputy minister and seek to create a Senate with 60 members that is going to create yet another onerous burden on the fiscus,” he said.

The MP decried the dollarisation of the economy saying it deepened poverty among 80% of the population that live under the poverty datum line and have to buy products pegged against the greenback.

Beginning this month, Zimbabweans who have access to foreign currency are allowed to buy fuel at designated service stations using hard currencies.

“When we buy our products at international prices, this increases the gap between the rich and the poor because the rich are the ones who control the dollarised economy. Dollarisation of the economy is an acknowledgement of failure,” he said.

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