MDC MPs reject supplementary budget

via MDC MPs reject supplementary budget September 24, 2014

OPPOSITION MPs yesterday continued piling brickbats on Finance minister Patrick Chinamasa for seeking to introduce a $1 billion supplementary budget at the same time conceding that government’s revenue inflows were below target.

Former Finance minister and Harare East MP Tendai Biti (MDC-T) described Chinamasa’s move as “feja feja [street gambling] economics”, saying his Mid-Term Fiscal Review Policy Statement lacked cyclical fiscal measures to mitigate dis-inflation which was now affecting the country.

The MPs poured out their anger when Chinamasa moved a motion to debate the Finance No 2 Bill to support his supplementary budget.

“Chinamasa confesses that government revenue has been decreasing from its targeted $4,1 billion, but in the macro-economic framework he accepts he is going to collect $3,8 billion, which is a difference of 6,55% and so the budget is being reduced by roughly 7%,” Biti said.

“However, he later says he needs a $950 million supplementary budget, but it is not being added to the $3, 8 billion — it is instead added to the outline 2014 budget of $4,1 billion to make the budget $5,1 billion — which is an additional 32% and if you add the 7%, it means the budget deficit is 39%.”

Biti said there was going to be a fundamental downward growth of the economy because it was revised from 11,9% in 2011 to 3,1% in 2014, meaning the country was now in a recession.

“In a recession, the Minister of Finance must execute under cyclical measures because without that, we have a situation where if your car has one puncture, you do not get out the tyre puncture, but you take out a knife and puncture the remaining three tyres,” he said.

“Prices of goods will reduce not because of genuine competition, but the disinflation means the gross income of businesses is reduced yet it is impossible to cut wages and companies will shut down.”

Biti said some of the solutions were to stop borrowing and live within means, find money to put into the productive sector, conclude the Zimbabwe Accelerated Debt Strategy of $8,8 billion and discuss with the World Bank and International Monetary Fund so that the country could access funding, put an end on the land question by having bankable title deeds, find money for infrastructure rehabilitation and solve the political crisis.

Priscilla Misihairabwi-Mushonga (MDC Proportional Representation MP) said it was unfortunate that when the House was expecting to review the budget, Chinamasa then smuggled his $1 billion supplementary budget.

“I was expecting the minister to reduce duty on sanitary wear. I am not sure what he wants us as women to do — maybe he wants us to bring bloodstained sanitary wear in the House,” Misihairabwi-Mushonga said.

Kuwadzana MP Lucia Matibenga (MDC-T) said taxing of workers’ allowances was tantamount to milking an already thin cow until it bled.