Mike Theo Hambulo Wrote;
LET’S LOOK AT THE REVENUE SIDE OF THE BUDGET, THIS BUDGET MAY COLLAPSE UPND
“Intention to borrow $4.6billion to finance budget is not prudent, making mineral royalty deductible will make us lose $600m revenue”
Colleagues as a UPND supporter who has done ACCA and Economics, I would like to caution us not to fall into the same debt trap we were condemning the former ruling Patriotic Front for.
The pronouncements in the budget are exciting and have created hope for workers and the general populace.
This is very good for us to make good pronouncements but we are bound to kill our party when these things backfire!
My thoughts on our budget
Musokotwane’s Budget
Budget Size -K173bn or $10bn.
Dr. Situmbeko says will be able to source for $10bn in 2022 but at the same time have been complaining that PF left a huge debt of $12.9bn.
By the way Dr. Musokotwane’s share of the $12.9bn debt is $1.9 plus road commitments he left PF with under the formula one road project where roads were being built overnight.
Dr. Musokotwane intends to finance the budget partly using $4.3bn debt. This is a huge deficit to finance in one year.
Our party said PF had over borrowed. PF borrowed $11bn in 10 years and he is going to borrow $4.3bn in just one year of 2022!
Now multiply that by five years. By 2026 the man at this rate would have borrowed over $20bn besides our current debt.
Dr. Musokotwane further says he will employ 11,200 health personnel and 30,000 teachers.
This is good but the size of wage bill for civil servants is already at 53% of the domestic revenue.
We are not against employing our brothers and sisters. UPND is about job creation! We promised that. But we are also we must worry about the implications.
How can Dr. Musokotwane say he will use the $1.3bn SDR to employ 41,200 as if the government will be receiving the SDRs every year?
What will happen next year? The move to employ 41,000 employees has added k2.6bn to the government wage bill and if you add supporting equipment to be used by the newly employed public look at a total of k3bn a year in added government expenditure. Are we able to sustain this? This is the chipantepante economics we condemned PF for! We need to do better as UPND!
The Zambian kwacha gained in July august due to the mineral royalty. Mines in August paid in total over $600m in taxes.
Now it seems our minister has reversed this trend as he has agreed to make mineral royal tax deductible meaning we kiss good bye mines posting profits! The mines have lied to him that they will inject $2bn but we all know that they just bring in machinery at inflated costs and just this purported capital injection will be recorded as an expense therefore making Zambia miss out the opportunity to benefit from high copper prices.
That is why us youths said we needed new blood at finance because it seems we are headed for doom. As UPND, let us not just support things. We need to change this country and not just play to the gallery. To be honest am very disappointed
We promised lower taxes to employees. How can we create new businesses with 37.5% PAYE? It’s a laughable matter to award a k50 to employees by exempting only k500 from taxation! No wonder I have never trusted politicians. Zambia needs real change and not this kind of approach
We should correct this or fall into the same trap like other parties