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of Finance - Mid Term Fiscal Policy Review, 2007
Presented to House of Assembly Thursday September 06, 2007
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1. Mr Speaker
Sir, the objective of this Mid Term Fiscal Policy Review is to update
Honourable Members on the performance of the economy and the 2007
National Budget during the first half of the year.
2. I will also
be making proposals for a Supplementary Budget to ensure efficient
operations of the Government up to the end of the year. This will
also allow for provision of additional resources for the completion
of a number of capital development projects where progress was being
hampered by escalating costs under the prevailing inflationary environment.
3. The Review
also offers the opportunity for Government to outline some of the
measures necessary to stabilise the economy, in line with the obligations
that arise under the Social Contract by the Tripartite Negotiating
Forum partners, that is, Government, Business and Labour.
4. I will, therefore,
take advantage of this Mid-Term Fiscal Policy Review to propose
various interventions drawing from developments during the first
half of 2007.
5. As Honourable
Members are aware, the Mid-Term Fiscal Policy Review is coming against
a background of incessant price increases by most of the business
community during the first half of this year.
6. This development
had seen the unwarranted adjustment of prices, which in too many
cases was on an hourly basis, with devastating effects on the ability
of ordinary workers and consumers to plan and access basic goods
this was taking place soon after the signing of the three Protocols
under the Social Contract obligating Labour, Government and Business
to work together towards stabilising prices, promoting increased
productivity and foreign exchange generation.
to effect 'regime change' by the former colonial powers
through the use of prices instability, confirmed the fact that the
hourly price adjustments by Business were no longer a market phenomenon
for their viability, but rather an instrument towards this political
9. In response
to this 'economic carnage', Government was forced to
intervene by instituting price monitoring and stabilisation measures
for restoring sanity in the goods and services markets.
10. This saw
clampdown on unscrupulous businesses engaged in such unethical behaviour,
while at the same time engaging those with genuine commitment to
work with Government in addressing the challenges facing our economy.
11. Mr Speaker
Sir, now that the price stabilisation exercise has settled in, and
that the business community has expressed its willingness to enter
into a 'real' Social Contract, it is therefore, time
to return to normalcy through the operationalisation of the National
Incomes and Pricing Commission. This should contribute towards addressing
other challenges facing the economy.
12. Mr Speaker
Sir, given the declared and undeclared sanctions on our country
by some of the Western countries, the policy imperatives for this
Review, the forthcoming 2008 National Budget, and the Monetary Policy
Statement will, therefore, strive to support increased economic
activity, while at the same time cushioning the vulnerable groups
in our society.
13. Mr Speaker
Sir, before making proposals on the 2007 Supplementary Budget, allow
me to first outline the economic and fiscal developments during
the first half of 2007.
the full document
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