For decades there has been a significant amount of comment and debate regarding the fiscal policy, monetary policy, tax and current governmental policies.
SUNDAY OPINION BY BRIAN SEDZE
There are many more such “debates” around the forthcoming fiscal policy associated with other letters and articles, many points/opinions stated, refuted and stated again but it strikes me that this discussion is not just about liberal/traditional or corporatist/socialist views, but rather what role “we the people” want our government to play in our society and our daily lives. The role will actually be more evident in the forthcoming fiscal policy.
The less that a government takes from society in taxes, resources and capital, the more there is for individuals to leverage to the benefit of society.
It is imperative that the government reduces civil service bill, state enterprise support and recurrent expenditures with no value addition. Government may need to deliberately expand the tax base than increase the tax quantum like the abhorrent mid-term fiscal policy. Zero based budgeting or value addition based budgeting may need to be adopted.
The majority of state enterprises have failed to discharge the desired socialistic mandate by any measure including, but not limited to, measures of increasing employment, contribution to GDP, contribution to the tax base, service delivery, growth and economic justice.
If they have failed, it’s time to remove those that do not fit the strategic thrust of any right thinking government. The majority of the state enterprises no longer have significant strategic importance.
They have failed.
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These state enterprises must be allowed to reconstruct, be weaned off government and by extension reduce the tax burden on poor Zimbabweans.
A government should be as close as possible to the people it is responsible to, that this is necessary for it to truly operate with the consent of the governed. The smaller the governmental unit, the better it can understand and accommodate local issues. We require a smaller government.
If we fail to have a small government but we want to be more intimate and govern with consent of the governed, we need to decentralise decisions relating to investment, tourism, infrastructure, economic development, and social welfare, labour among many other facets of government. By enabling provinces to be responsible for their welfare we are driving innovation tailor-made to the needs of a particular society instead of the one-size-fits-all spirit of Harare. I believe the government fiscal policy must decentralise and at best devolve economic policy.
While in 1980 the world made money from breaking backs in agriculture, mining and manufacturing, the same way of the 1980s to make a successful economy may not ring true in 2014.
There are more tools that companies and individuals can use to achieve success than at any time in history — more access to information, to capital, to mobility and to the most powerful tool available — education.
Instead of driving the entire budget on the warped and archaic belief on “agricultural revolution” and “industrial revolution” as drivers of the economy new thinking points at other revolutions driven by service and technology.
In any case the land reform has not been successful at breeding new best breed farmers who don’t cry each time for “government support”.
Zimbabwe needs to identify its unique strategic advantages like in Porters Diamond model to have a successful national strategy and use the same to formulate successful fiscal policy.
Because as few as 300 000 Zimbabwean benefited from the land reform, the reform itself was not fair and equitable.
To bring equity, a significant tax must be levied per hectare not only to spur and force productivity but also to increase the tax base. It’s not only the urbanites who must bear the wrath of these painful taxes.
In addition, because it’s just this one Zimbabwe, those who had land allocated to them pursuant to the land reform must give up their original rural areas land to enable resettlement of those who did not benefit from the land reform and are still farming in arid zones.
A government need not tax its people to the very last cent but rather increase the tax base. It goes without saying that there are few economies that are successful without express or implied blessing of western powers [ask Cuba, Russia and DPRK].
It’s not likely Zimbabwe will change that hence it requires a permanent team that continually and consistently engages the west and world finance institutions. Purposeful engagement will drive investment and to some extent some freebies.
Building brand Zimbabwe is a fundamental quest to also be pursued. Government must ease the economic entry barriers and way of doing business by learning of successes in that arena like Rwanda, Ghana, Mauritius and Seychelles.
Zimbabwe should synchronise thoughts, idealism, philosophies, laws and regulations. There is a reason why we rank lowest in attracting foreign direct investment, outwitted by the likes of Mozambique.
Our laws and policies are not synchronised. To speak from one book, a clear written position on economic policy and laws is required in the model of “Investing in Zimbabwe”.
There are certainly issues of national importance that have arisen with the coming of a modernised society. Some would argue that there is no possibility that a person in 1980 could know what wonders would exist in 2014.
While that is absolutely true, it is also true that a core principle will be just as true today as it was then. The basic concepts of life, liberty and the pursuit of happiness are just as relevant today, even with a different economic and societal context.
If we accept that premise, the question becomes: what is the role of our government in today’s world? Brian Sedze is an author on Innovation, President of Free Enterprise Initiative and Chairman of Africa Innovation. He can be contacted on [email protected]
