Critics Question Budget’s Fundamentals

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By Catherine Sasman

WINDHOEK

Opposition CoD MP Nora Schimming-Chase yesterday questioned the extent to which the 2008/09 budget can be viewed as ‘pro-poor’, arguing that the increase for pensioners still falls far short of the needs of this marginalised group.

The DTA’s Johan de Waal questioned the capacity of the Government to fulfill the requirements of the budget, and expressed concern over ‘over-reliance’ on Southern African Customs Union (SACU) revenue, which constitute a whopping 44 percent of the total budget.

Old Mutual Africa Managing Director, Johannes !Gawaxab, said not even a broadening of the tax base would fill the gap now covered through SACU revenue, saying that the situation was “not healthy”.

Nepru’s Joel Eita echoed this worry, particularly in light of the fact that the SACU revenue pool may decline because of the economic partnership agreement (EPA) expected to be concluded by the end of this year and the SADC FTA [free trade agreement].

Parliamentarians also have reservations over the huge chunk the education sector again received, saying that the progressive increase in the sector has so far been met with a disappointing progressive decrease in the performance of the sector.

Finance Permanent Secretary Calle Schlettwein said the budget should be seen for its pro-growth potential where jobs can be created.

Chairperson of the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration, Hage Geingob, said the substantial increased allocation to war veterans – 8 000 of whom have been considered in the budget, according to Schlettwein – is an “outstanding commitment” of the budget, describing the budget as “forward looking”.

!Gawaxab commended the budget in its attempt to strike a balance between social reconstruction, job creation and capital development on the one hand and what the Treasury can afford on the other.

He, however, said the allocation to the Ministry of Defence was disappointing, considering that it is not a productive sector.

He further said it was lamentable that tourism’s allocation continues to shrink, given the fact that this sector has grown as a key employer and foreign currency earner.

!Gawaxab further said a concern is Government’s continued support to non-performing State-Owned Enterprises (SOEs).

In addition to addressing public service inefficiencies through the proposed Productivity Unit, said !Gawaxab, this unit should be tasked to find a way to enhance the returns of funds spent on the education sector, saying that this would go a long way to ensure prosperity for all Namibians.

On the budget’s impact on equity and the bond market, !Gawaxab said a net issuance of N$337 million is expected despite the budget deficit.

“New insurances will amount to N$919 million, while N$582 million will be redeemed. This issuance is expected to further decline in subsequent years,” said !Gawaxab.

He said a further downward pressure on bond yields seems inevitable.

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