PEP STANCE ON BUDGET
Dear Editor, AS Patriots for E c o n o m i c Progress (PeP) we have noted with interest the 2022 nation al budget presented by the UPND administration in Parliament last Friday. Our considered view is that the 2022 national budget is not significantly different from the other national budgets that have been presented over the past 10 years. It still relies heavily on debt to finance consumption, makes little effort to dismantle do mestic arrears, places greater emphasis on handouts (Social Cash Transfer and Farmer Input Support Programme) at the expense of economic em powerment to citizens through small loans. It still crowds out the private sector from access to reason ably priced finance due to high levels of domestic debt and is too expansionary as it seeks to hire as many as 40, 000 civil servants all in one fiscal year. We also wish to put it on record that it is extremely un likely that the International Monetary Fund (IMF) will ap prove the US$3 billion bailout loan which the government is seeking. The standard operating pro cedures of the IMF are to only bailout countries which are making an honest effort at im plementing austerity measures and not those who are pursu ing an expansionary fiscal pol icy. It must be noted that the 2022 national budget is more expansionary in nature than the national budgets of the past five years which the IMF refused to fund through a bail out loan. The fact that there has been a change of adminis tration in itself matters less to the IMF. The key consideration is the fiscal stance taken by a given administration. In this par ticular case, given the UPND administration’s decision to provide unconditional free education to the poor and rich alike and to exponentially ex pand the civil service through the recruitment of more than 40, 000 civil servants in a sin gle fiscal year, there is no ques tion that Zambia’s 2022 bud get is the most expansionary that Africa has ever seen in the past 20 years. We wish to take this oppor tunity to advise the UPND ad ministration to come up with a plan B regarding funding of the 2022 budget, in the likely scenario that the IMF decides not to extend a bailout loan. Such a plan B could con sist of implementing free ed ucation in a phased manner as opposed to rolling it out all at once. In this regard, Government could consider implementing free education for grade 1 to 4 during the 2022 fiscal, grade 5 to 8 during the 2023 fiscal year, grade 9 to 12 during the 2024 fiscal year and tertiary education during the 2025 fiscal year. Such a phased approach would exert less pressure on the national treasury and also ensure an orderly implementation of the free education policy. We also bemoan the lack of effort by the UPND adminis tration in the 2022 budget to make the tax burden fair and equitable between corporate taxpayers and individuals. We fail to get the rationale why Government decided to introduce a five-year tax holi day for ceramic floor tile man ufacturers such as Marcopolo Tiles while failing to adjust the 37.5 percent upper band for Pay As You Earn from the cur rent K6, 900 despite the huge increase in the cost of living that has taken place over the past year. Why should foreign Chinese manufacturers be given a tax holiday at the expense of the Zambian workforce which is heavily taxed? Given how unfair, how un reasonable and how unreal istic the 2022 national bud get is, we wish to call upon the UPND administration in general and the Minister of Finance in particular to con sider withdrawing the budget from Parliament so that it can be re-drafted. If the proposal to withdraw the 2022 budget is not consid ered, the nation will be headed for economic chaos of untold proportions in 2022. The na tion should take this as a time ly warning. SEAN E. TEMBO, PeP President.
