Budget committee faults projections Opposition alarmed by soaring debt
Andrew Chenge
However, the amount has not been listed as a debt from the current financial year.
The committee said such a trend was noticed in the 2013/14 financial year which had an expenditure float of 611.4bn/- carried over from the 2012/13 financial year, but was not listed as a debt.
Presenting the committee’s report in the National Assembly yesterday, its chairman Andrew Chenge said the accumulation of debt from the previous budget had reached 2.09trn/- by December 2013, equivalent to 4 percent of the national income.
On the government expenditure in 2013/14 financial year, Chenge said there were some areas that received more money than the approved budget - something that caused deficits in other areas.
He mentioned such areas as the ministry for Works which received an extra of 43.36bn/- to finance road rehabilitation projects while the ministry for Foreign Affairs and International Cooperation received additional 16.65bn/- to finance new needs for Embassies in Comoro, The Hague as well as to cover leaders’ travel costs.
“These areas exhausted 115.81bn/- in 2013/14 financial year,” he said.
“The additional money used by the ministry of Works alone could have been the budget for two ministries,” he noted, adding that the ministry has for years used more money than was approved by parliament.
To avoid this, the committee advised the government on the importance of preparing a realistic budget and disciplined expenditure.
Furthermore, the committee also projected that by the end of 2013/14 financial year, the budget deficit will approximately reach 2.014trn/-, equal to the revenues that weren’t collected in that year.
“Despite the deficit, the 2014/15 budget has increased by 1.6trn/- compared to that of last year. This means that the government is getting meager revenues in the ending financial year,” Chenge said, adding that the figures implied that the 2014/15 budget already has a deficit of 3.6trn/-, meaning the deficit of 2trn/ from the previous year and the addition of 1.6trn/- in the coming budget.
With regard to the national debt which by March this year stood at 30.563trn/-, Chenge said the committee is not satisfied with the way the government is managing it, saying the establishment of national debt management department should be speeded up.
“Although the government perceives the national debt as sustainable, the committee considers it a burden. Most of the previous debts have not been added up with the current records…,” said Chenge, adding that the government owes PSPF 3.3trn/-.
Meanwhile, the official opposition has criticised the expenditure of resources acquired in the form of loans, suggesting that the government should obtain a permit from the Parliament before acquiring loans.
Presenting the official opposition speech on the budget estimates and expenditure for 2014/15, James Mbatia, said the government should consider the proposed sources of revenues instead of depending on loans.
“The national debt has increased drastically. The speech of the minister of Finance indicated that by March this year the national debt had reached 30.563trn/- which is an increment of 7 trillion/- from the 23.674trn/- recorded in 2013. This increment alone is a full budget for 2008/09 financial year… it should be noted that 2009 was just five years ago,” said Mbatia.
The official opposition also suggested that the Pay As You Earn (PAYE) be reduced to 9 percent and that the payment of the PAYE should only be applicable to those earning a salary of more than 250,000/- per month.
The official opposition maintained that the budget does not reflect efforts to reduce poverty by reducing the tax burden on the ordinary people.
SOURCE:
THE GUARDIAN
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