FINANCE minister Tendai Biti on Tuesday said critical sectors such as electricity supply need to be addressed before substantial increases can be made on civil servants salaries.
“We will review everything in the budget including labour. This will not just be in the context of labour and wages.
“A wage increase per se is meaningless unless you address other fundamentals,” he said, launching the 2011 national budget consultative process.
“We will not push for populist things that don’t benefit the worker at the end of the day,” he said.
The civil service has been agitating for a salary increment to cushion them against the rising cost of living.
Government workers are currently earning monthly salaries of between US$165 and US$250, figures which are below the poverty datum line of around US$500.
Biti said next year’s budget would be around US$2 billion although he had anticipated double the amount on the back of revenue from diamond sales.
He said Treasury is collecting an average of US$140 million per month and to reach the Gross Domestic Product levels of US$9 billion in 1996 it has to collect an average of US$400 million per month.
Biti said the 2011 budget would be premised on a democratic consultative process with an outreach programme in all provinces of the country.
However, he said the budget would be based on a “hard constraints” perspective that leaves government with little room to manouvre in its fiscal policy owing to limited financial resources.
“We don’t want the budget to amount to an unrealistic wish list like the situation last year.
“The list (of requirements) from line ministries came to US$12 billion when government could hardly raise US$1 billion in revenue collections,” said Biti.
Biti said the budget consultative process would adopt a medium-term perspective based on a macro economic framework, also taking into account that the country may or may not go to elections next year.
He said the bickering among the principals in the Global Political Agreement would act as a constraint to the effective execution of the budget.
“The uncertainty in the Global Political Agreement and a lack of  common vision is a challenge.
“The failure to depoliticise the management of the economy is a hindrance as politics is weighing down the economy,” he said.
This year’s budget was forecast at US$2,25 billion.
Of that amount revenue was supposed to contribute US$1, 4 billion with the remainder coming from the vote of credit.
However, the vote of credit has performed dismally and US$207 million has come in from cooperating partners.
Biti said there were expectations that money from diamond sales would give Treasury fiscal space but the results so far have not been pleasing.
“We have to be realistic and the philosophy that we will have to eat what we have hunted is still going to be correct but as shown by that sale (diamond auction) even the hunting itself is proving to be difficult,” he said.

BY KUDZAI CHIMHANGWA

Comments (2)

Show/Hide comments

Show/Hide comment form