LOCAL economists and opposition legislators are piling pressure on Finance minister Patrick Chinamasa to slash government expenditure, particularly travel expenses and untaxed allowances paid to the Executive, to reduce public spending.
BY VENERANDA LANGA
The call came as Chinamasa recently admitted having sleepless nights over spiralling government expenditure, especially the wage bill.
Norton legislator Temba Mliswa (Independent) last week said the Executive needed to cut down on President Robert Mugabe’s foreign trips and profligacy, where ministers drive expensive vehicles in a country where the National Budget averages $4 billion.
“I want to say that the Executive expenditure must be spoken about in terms of how much it is spending by going abroad. We cannot continue like this,” Mliswa said.
“You find that the parts of the Range Rovers the ministers are driving are from abroad and they require foreign currency and yet our Willowvale Mazda Motor Industry has now become storage for maize instead of manufacturing vehicles.”
Bulawayo South lawmaker Eddie Cross (MDC-T) warned that Zimbabwe might slide back to the 2008 hyper-inflationary era if the government fails to contain revenue leakages.
“The consequences are that if we are not careful to heed the warnings by the International Monetary Fund (IMF), we will face a similar collapse in the country like the 2008 scenario,” he said. “The budget needs further surgery and we have to reduce expenditure on salaries to less than 60% of our revenue.”
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Cross said reduction of expenditure by 60% could be achieved easily by simply cancelling civil servants’ untaxed allowances.
“If we cancel the allowances to civil servants, we could easily increase salaries,” he said.
“The reality is that allowances are not taxed while salaries are taxed. This could increase the tax revenue to the State and it would bring our expenditure on personnel down below the threshold of 60%.
“Expenditure this year could exceed $5 billion and there is absolutely no growth in revenues.
“If we consolidate all revenue collected into the Consolidated Revenue Fund as required by the Constitution, it would increase our revenues.
Cross’s suggestion dovetailed with observations by a senior economist in the Office of the President and Cabinet, Ashok Chakravarti, who said untaxed allowances for top government officials were accounting for 43% of total State expenditure.
