Friday, July 15, 2011

No supplementary budget this yr: Biti

No supplementary budget this yr: Biti

Posted by By Our reporter at 14 July, at 09 : 46 AM Print

FINANCE Minister Tendai Biti says there will be no supplementary budget this year when he presents his mid-term fiscal policy statement this month.

He said the country’s economy did not have the capacity to fund any extra budget since it was already struggling to raise money to finance this year’s budget.

He was responding to a question from Mbire MP Paul Mazikana (Zanu-PF) during a question-and-answer session.

Mazikana had asked him whether he would present a supplementary budget to cater for the civil servants’ salary increment.

“The position is that on July 26, I will present a mid-term fiscal policy review. There will be no supplementary budget. A supplementary budget presupposes that there is a capacity to increase your budget. There is no capacity,” said Minister Biti.

He said Treasury had only recorded a significant inflow of money in March and June, while the rest of the other months, revenue inflows were subdued.

He said this painted a gloomy picture in terms of financing the 2011 national budget of US$2,7 billion.

“We were able to break the US$230 million monthly revenue collection target for these two months because they are the quarterly payment dates on corporate tax,” he said.

There will be a US$500 million budget deficit arising from the January salary increment, purchase of grain to complement strategic reserves, constitution-making process and travelling costs.

“We have spent over US$30 million on travelling and this US$500 million deficit does not include the cost of the referendum the country will hold,” he said.

Minister Biti urged people to brace for a “collapse of fiscal space and gnashing of teeth as people should tighten their belts.”
Any additional expenditure outside the budgeted programmes would mean other allocations or areas would suffer, Minister Biti said.

He said Government ought to get rid of 75,000 “ghost workers” and improve transparency and accountability on diamond sale proceeds.

He slammed the International Monetary Fund, which he said did not accord small and poor nations equal treatment, yet the United Nations treated all nations equally.

Responding to another question, Prime Minister Morgan Tsvangirai, expressed concern at ministers who failed to attend the question and answer session.

Nyanga South MP, Willard Chimbetete (MDC-T) had implored the PM to take “restrictive measures” (sic) against ministers who failed to attend the sessions.

“We are seized with this issue; in fact every Cabinet meeting on Tuesday we table all questions that are on the Order Paper. I will ensure that we give focus to the business of this House. I, however, see that there has been some improvement today,” said the PM.

Industry and Commerce Deputy Minister, Mike Bimha, said Government was now in its final stage before the operationalization of the deal it signed with Indian company, Essar for the joint venture to revive Zimbabwe Iron and Steel Company.

He said the loose ends that needed to be tied related to other ministries that dealt with power generation (Ministry of Energy), railway (Ministry of Transport) and Mines Ministry.

“The hope is that by the end of this month we should see the finalisation of the agreement with these other ministries.

“We would then not only see the payment of salaries but the payment of debts, locally and externally,” said Deputy Minister Bimha.

He said there were a number of issues that ought to be discussed and some of the activities would entail Essar making extra investments in other areas such as power generation and improvement of the railways.

He had been asked when salaries for workers would be paid and whether it was true that Government had surrendered 80 percent of its iron ore reserves to Essar.

Constitutional and Parliamentary Affairs Minister Eric Matinenga said the Constituency Development Fund for this year would only be paid to those legislators that had properly accounted for the US$50 000 given to them in last year’s budget and submitted returns.

He said only 60 MPs had submitted returns.

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