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2013 Budget debate due 27 November - Bill Watch 52/2012
Veritas
November 26, 2012

Both Houses of Parliament will Resume on Tuesday 27th November

Budget presented

The Minister of Finance presented the 2013 Budget Statement in the House of Assembly on Thursday 15th November. At the conclusion of his speech the Minister tabled the Estimates of Expenditure for the fiscal year 2013 [the 2013 "Blue Book"]. Estimates of Expenditure are available on the Ministry of Finance website www.zimtreasury.gov.zw. For those without Internet access Veritas can email them on request [available on request from veritas@mango.zw] [Note: these documents are large and may be difficult to download for those without broadband; the Budget Statement is a zipped pdf document of 3.3 MB, the Blue Book is a zipped Excel document of 3.5 MB].

A noteworthy feature of the Blue Book is its inclusion of a "Ministry profile and outputs", signed by its accounting officer [in most cases, the permanent secretary], for each and every Ministry. These include statements of: major achievements during 2012; key result areas; policy priorities for 2015; and tables of goals, outcomes, expected output and indicators of achievement.

Expenditure - Selected Figures

[2012 amended figures are shown for comparison purposes]

Total projected expenditure: $3.82 billion [2012 - $3.62 billion]

All expenditure comes out of the Consolidated Revenue Fund [CRF] consisting of all government revenues. True to the Minister's guiding principle that the government will only spend what it earns, the Budget aims to align expenditure to revenue. The breakdown is: employment costs 68.5%; operations 16.8%; capital expenditure 14.6%.

Expenditure comes under two headings:

  • Constitutional and statutory appropriations: $440 million [2012 $425 million]
  • Vote appropriations: $3.42 billion [2012 - $3.2 billion] [see below for major vote appropriations]

Constitutional and statutory appropriations ["cons and stats"]

The Constitution and certain statutes [Acts of Parliament] mandate these payments from the CRF for specific purposes. They do not have to be approved by Parliament again during the current Budget exercise, but they must be covered by projected revenue. Examples of "cons and stats" are: the salaries and allowances of the President, the Speaker of the House of Assembly and the President of the Senate, the judges and other constitutional appointees such as the Attorney-General, Public Protector, Comptroller and Auditor-General; all State pensions, including veterans and ex-political prisoners pensions. Pension-related payments account for the bulk of "cons and stats". Amounts listed under this heading include:

  • President's salary and allowances: $110 000 [2012 $105 000]
  • Speaker's and Senate President's salary and allowances: $170 000 [2012 - $160 000]
  • Public Service and other State pensions [ex-judges, Ministers, MPs etc]: $231 million [2012 - $215 million]
  • War veterans etc pensions: $101 million [$102 million]
  • Commutation of pensions: $54 million [$62 million]

Major allocations to Ministries

[These and all the other "vote appropriations" in the Estimates require the approval of the House of Assembly and enactment into law by the Appropriation Bill. They include the majority of State employment costs.]

Figures to nearest million

2012 2013
Education 755 716
Health 381 301
Higher Education 287 271
Defence 356 318
Home Affairs (Including Police) 308 297
Agriculture 148 184
Justice (including Prisons) 96 88

Allocations to Ministries incorporate expenditure for:

Constitutional Referendum and Elections - The Minister said the amount needed for these "inescapable programmes" exceeds US$150 million, way above the proposed 2013 allocation of US$25 million. He would therefore have to rely on Government's "friends and partners" for assistance and would also look for funds from diamond revenues.

Financing of political parties - The vote for the Ministry of Justice includes $5 million for disbursement to political parties under the Political Parties (Finance) Act.

Constitutional Commissions - Amounts allocated for running costs are: Human Rights Commission - $1 354 000; Zimbabwe Electoral Commission - $7 197 000; Media and Information Commission - $314 000; Anti-Corruption Commission - $2 246 000.

Taxation Proposals and Financial Sector Reform

Taxation - No changes to income tax bands or rates are proposed, but the tax exempt threshold for annual bonuses goes up to $1 000 with effect from 1st November, covering 2012 end of year bonuses. Changes to customs duty to encourage local manufacturers is also proposed, one of which has already been gazetted [see below]. There will be a "sin tax" [excise duty increase] on clear beer and cigarettes with effect from 1st December, proceeds to be earmarked for the education sector. There will be other customs duty changes from 1st January 2014.

Financial sector changes - The Minister said there will be measures to correct "corrosively high interest rates" on bank loans and to mobilise domestic savings, such as regulating high bank charges and requiring payment of interest on deposits. There will be Bills to make major amendments to the Banking Act; to enact a new Deposit Protection Act and a Microfinance Act; and to make detailed amendments to the Bank Use Promotion and Suppression of Money-Laundering Act.

Business in the House and Senate in the Coming Week

House of Assembly

Resumption of Budget debate on Tuesday 27th November - The House of Assembly will start debate on the Budget, starting with a contribution by the chairperson of the Portfolio Committee on Budget, Finance and Economic Development.

After the debate and the approval of the Estimates of Expenditure, the two Budget Bills will be introduced in the House:

  • Appropriation (2013) Bill - to authorise expenditure in accordance with the Estimates of Expenditure
  • Finance (No. 2) Bill - to make amendments to the Income Tax Act, the VAT Act, the Customs and Excise Act, giving effect to changes proposed in the Budget statement. The Bill also contains provisions designed to protect the assets of Air Zimbabwe Corporation and its successor company and the Grain Marketing Board from being attached and sold to satisfy debts to their creditors; for Air Zimbabwe this protection will lapse on 1st January 2015 [the explanation given in the Bill's explanatory memorandum is that this temporary protection is to enable Air Zimbabwe to repay its creditors "in orderly fashion"].

Motions: There are several motions on the Order Paper in addition to the traditional motion of thanks to the President for his speech opening the session:

  • Hon Gonese's motion to revive his Private Member's Bill to repeal section 121(3) of the Criminal Procedure and Evidence Act [the Bill lapsed at the end of last session]. This is unlikely to come up until Wednesday when private members' business has precedence over Government business. It remains to be seen whether the motion will be stalled on the basis that the admissibility of Private Member's Bills is sub judice in a Supreme Court appeal [see Bill Watch 22/2012 of 23rd May].
  • a motion calling for reasonable remuneration for Government workers
  • a motion to revive a lapsed motion on a portfolio committee report on challenges in the education sector.
  • Senate - The only item on the Order Paper is the motion of thanks to the President.

Expulsion from MDC of MPs and Senators

The Professor Welshman Ncube-led MDC on 19th November announced the expulsion from the party of 3 members of the House of Assembly [Deputy Speaker Nomalanga Khumalo, Thankeko Mnkandhla and Maxwell Dube] and 2 Senators [Kembo Dube and Dalumuzi Kumalo]; all hold Matabeleland seats. The MDC has told them that at a time of its choosing the expulsions will be notified to the Speaker and the President of the Senate to trigger automatic vacation of their in terms of section 41(1)(e) of the Constitution. Professor Mutambara, who was MDC leader at the time they were elected on the MDC ticket, has written to Parliament saying the Ncube executive has no right to take this step when the Supreme Court has not decided the contested leadership issue [the Mutambara camp has lodged appeals against two High Court decisions in favour of Professor Ncube]. Pending receipt of the expulsion notifications by Parliament, all five individuals retain their seats. And when/if such notifications are lodged, the yet-to-be-heard Supreme Court proceedings may well delay a final decision on their fate.

Appointment of Private Voluntary Organisations [PVO] Board

A General Notice [GN 504/2012] gazetted on 16th November announced the appointment by the Minister of Labour and Social Services of the PVO Board. There are 21 members, as required by the PVO Act - 5 representing PVOs at national level, 10 representing PVOs at provincial level [one from each province], and six representing Government Ministries specified in the Act. These members will serve a three-year term of office ending on 2nd September 2015. Ms Lindiwe Chaza-Jangara of NANGO is the chairperson. [GN with full list available from veritas@mango.zw]

Government Gazette 16th to 23rd November

Bills

Two Budget Bills [see above] were gazetted on 23rd November [available from veritas@mango.zw]:

Statutory Instruments

Customs Duty Two SIs were gazetted on Budget Day to come into effect on 16th November:

SI 178A/2012 - new duty on chicken imports

SI 178B/2012 - rebate of duty on fiscalised electronic registers, fiscal memory devices and spares

Collective bargaining agreement SI 179/2012 covers wages and allowances for the commercial sectors for July 2012- June 2013.

Local authority by-laws SI 180/2012 sets out new rents and service charges for the Jahunda area of Gwanda municipality

Government financial statements [these have to be gazetted monthly and quarterly in terms of the Public Finance Management Act] - The statements for September were gazetted on 23rd November.

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