Malawi Government has left consumers out in the cold to freeze and face a difficult future by unveiling a tough budget for ordinary people, declared John Kapito head of Malawiâ€™s consumer watchdog the Consumers Association of Malawi.
Kapito observed on Saturday that there is no hope for job creation after Finance Minister Dr Ken Lipenga presented what analysts have described as a difficult 2012/13 budget for ordinary people.
“Itâ€™s going to be a tough one to the consumers, especially with the 49-percent devaluation of the local currency. And the type of reliefs [mentioned] do not signal much for the poor of the poorest with the current meltdown.
“Reduction on VAT and other taxes have not benefited the majority poor Malawians. They have ended up being perfect for businesses. So, in short, it is an austerity budget but a tough one for consumers,” he said.
The Civil Servants Trade Union (CSTU), which has been pressing for a 46-percent salary hike, on the other hand, said the organisation still hopes that what it discussed with government has not been breached.
CSTU general secretary Pontius Kalichero said the 21-percent salary increase for civil servants Lipenga announced is an average wage adjustment.
“Yes, we discussed the 46 percent and it is our hope that the 21 percent which was announced could just be an average. We proposed that the lowest paid should get 47 percent while the highest should get about nine percent.
“But we are yet to check with the government how they have apportioned that (21) percentage,” said Kalichero.
“We are still hoping that what we discussed (with government) has not been breached.”
Commenting on the budget as a whole, Kalichero said he is happy that most of the value-added taxes people have been complaining about have been scrapped.
“We have been complaining about taxation, but now will have to look at some taxation categories such as Pay As You Earn (Paye),” he said, referring to Paye tax-free band which most analysts proposed should move from K12 000 (about $48) to K25 000 (about $100).
On whether CSTU has an issue with government for not mentioning an increase in the minimum wage, Kalichero said government in most cases does not mention all the details of the budget.
“We will wait until we see an administrative circular,” he said.