Global IssuesFINANCE: Guns 'n Nurses in Namibia's Budget
Tax relief for lower income groups in Namibia should not conceal that the 2009/10 budget falls short in addressing structural problems in the economy, civil society organisations have charged.
Namibia's minister of finance, Saara Kuugongelwa-Amadhila, drew loud applause when she announced that $80 million in tax cuts for the poor will be partially offset by broadening the tax bracket at the higher end of the income scale.
According to the budget tabled on Mar. 18, those with annual earnings exceeding $75,000 will now pay 37 percent in income tax, up from 35 percent. Milk and sugar have also been added to the basket of basic foodstuffs that have been exempted from tax.
But these measures are hardly enough to address widespread unemployment among the country's population of two million, Hilma Shindondola, the director of the Labour Resource and Research Institute (LaRRI) in Windhoek told IPS.
'Unemployment borders 40 percent. Instead of raising the tax threshold on retrenchment packages from $10,000 to $30,000, mines should have been nationalised to make retrenchments unnecessary. By not addressing the underlying reasons for unemployment, government jumped the gun.'
Zack Makari of the Namibian Network of Aids Service Organisations (NANASO) agrees. 'Without work people will have a poor diet, which greatly complicates antiretroviral treatment.'
LaRRI was not involved in the drafting of the budget, but has been campaigning for more poverty alleviation programmes.
'We kept on proposing the Basic Income Grant (BIG) as a safety net for all Namibians, but it wasn't taken up. Existing social grants cover more people next year but the amount per person stays the same,' explained Shindondola.
Pensioners will receive a grant equivalent to U.S. $45 a month and transfers are also allocated to assist orphans and vulnerable children and people with disabilities. Every registered war veteran - veteran's welfare is a political hot potato in the country - will receive $200 a month. The allowance which was introduced in 2007 will cost the taxpayer $24 million in the current financial year.
Education gets $530 million, the lion's share of the 2009/10 Namibian budget of $2.55 billion. Air Namibia lands another $10 million bailout bringing to $246 million the total amount the state has spent on the national carrier. The government has budgeted for an estimated $400 million deficit or 4.5 percent of GDP with government debt expected to grow to $2.32 billion in 2010/11 - 29 percent of GDP.
The defence portfolio has been allocated $260 million while the health budget gets $240 million. This is the second year that military spending has outstripped health. The rationale advanced by the government for the increased spending on defence is the need to overhaul the military.
But civil society groups have slammed this as further evidence that the government does not have is priorities straight.
According to the World Health Organisation Namibia's three hospital beds per 1000 people compares favourably to neighbouring countries but the quality of health care is poor.
'Almost 20 years after independence our hospitals and clinics are in a deplorable state,' lamented Makari.
'There is a need for extra staff and upgrading of resources and service delivery. Health is a fundamental issue. We really want to know what criteria were used in allocating more money to Defence.'
But the budget is a strictly SWAPO affair. The ruling party holds a two-thirds majority in parliament. Opposition parties have complained that it is 'futile' to debate the budget because 'not one single letter or one cent is changed,' the local English daily newspaper, The Namibian, reported.
The civic group, NANASO, has been drawn into the budget process by the Ministry of Health but said they would continue to lobby parliamentarians and cabinet members for a greater role.
'More platforms where civil society and the general public can actively engage government on the budget,' is what is needed protested Shindondola.
Justine Hunter, the director of the Namibia Institute for Democracy (NID), said research conducted on the input on legislation indicates that civil society is 'moderately well-organised but has minimal input on decision-making'.
In the run-up to this year's budget, the NID published a 'Guide to the Namibian Budget' booklet to strengthen communication between civil society and the government.
'If people understand the budget, it will enable them to better interact with politicians,' said Hunter.
'We have a unique capacity when it comes to assessing the needs of communities,' Anna Beukes, who heads the Nangof Trust, an umbrella body for NGOs told IPS. 'The ministry of finance has given insight in the drafting of the budget. That goes a long way in helping us to identify the strategic points for alternative input.'
She said Nangof has already started a 'People's Budget' process to raise awareness on the budget, to improve access to financial data and to solicit inputs for next year?s budget.
© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service