The opposition on Monday tore apart the 2012/13 national budget, saying it has failed to mitigate effects of devaluation on the most vulnerable groups in Malawi.
In its response to the budget Finance Minister Ken Lipenga presented in Parliament last Friday, the Malawi Congress Party (MCP) asked President Joyce Banda not to fall into the same trap of attending every foreign event as it is costly to the taxpayer. MCP described the Presidentâ€™s trip to Liberia as an example of wastage of public resources.
MCP spokesperson on finance Joseph Njobvuyalema delivered a strongly worded response to the budget statement, saying it has failed to mitigate the impact of devaluation on poor Malawians and that of rising cost of living.
Said the MCP legislator: “Our concern is on the extension of tax-free threshold for PAYE [Pay As You Earn] from K12 000 to K15 000 is too little an adjustment considering the high cost of living. The cost of living for an average household is estimated at over K40 000. It would make a lot of sense if the tax-free threshold was moved to K20 000.â€
Njobvuyalema said the negative effects of the 49 percent devaluation of the kwacha include the erosion of purchasing power of Malawians.
On foreign travel and the presidential jet, Njobvuyalema said all non-essential travel should be stopped, saying the President has already travelled to six countries in Africa and beyond within two months. Banda has been to South Africa, Liberia, Nigeria, Mozambique, United Kingdom and United States of America.
Democratic Progressive Party (DPP) spokesperson on finance Frazer Nihorya said the budget statement reflects a wholesome acceptance of the International Monetary Fund (IMF) ideas. He said the budget lacks “seriousness” to address the plight of Malawians.
Said Nihorya: “Is this budget pro-poor or not? This carefree approach exposes Malawians to high economic risk. The 21 percent offered to civil servants is a mockery considering a 49 percent devaluation and skyrocketing inflation rate at 18.4 percent.â€
Government backbenchers gave Nihorya, a former deputy Minister of Finance in the Bingu wa Mutharika administration, a hand clap when he said with the devaluation and inflation rate, the increase in constituency development fund to K5 million (about $20 000) is not significant as the original value has already lost 49 percent.
Leader of opposition John Tembo described the budget as one of “hope” as it tries to reverse a laboratory experiment Malawians were taken to in the past, but said he is cautious in his hope as such promises in the past have not become reality.
Said Tembo: “Sometimes the silence of sons and daughters of this nation is taken for granted, because they are silent when they are being hurt. Sometimes we believe their silence â€˜ndikugona.â€™ We have been told to respect our leaders, but when the impunity stretches to the limit, they have capacity to rise up as witnessed on July 20 2011.â€