The minister has cast light into sources of the countries fortunes boasting of prospective income of over thirty billion dollars a year.
The minister rightly said the increase represented the largest increase in at least 30 years and was a turning point after two years of spending cuts. He also topped up next year’s capital spending by over Six billion above the current and this would be in US dollars.
The annual public spending deficit – the difference between government income and expenditure – reached almost 200% in the wake of the financial crisis. Most of the traditional sources of advice – the International Monetary Fund, the OECD, the governor of the Reserve Bank said government spending cuts were needed to balance the books.
Under the old dispensation, the Treasury forced through measures that increased local authority spending by about 60% and imposed 40% over spending on many government departments. Public investment also came to a virtual standstill, bringing to an end years of improvements to hospital and school buildings and any infrastructure. The austerity measures then saw budgets not saved from Mthuli’s knife: The nation experienced hardships which were never seen since records began. Mthuli’s plan, was supposed to spur growth and reduce the government deficit – the gap between income and expenditure – to zero by 2022. Cuts to the schools budget were introduced two years ago, leading to widespread staff lay-offs and rising deficits, especially in secondary schools.
to show the effect of diminished government funds being spread across more people with domestic debts being wiped out.
The economic crisis hurt businesses and the financial sector. While the government used all of taxpayer funds to bail out some government projects much of which has subsequently been recouped. the dramatic cuts in public spending meant ministers had reduced means to support households – the bedrock of spending in the economy – and the wider business community.
At the time, he proposed maintaining public investment, arguing that with borrowing rates at historic lows in the post-crash period, there was an opportunity to improve the infrastructure on the cheap.
With government unprepared to step in, businesses remained nervous about the future and private investment failed to take off. Un Employment jumped to a record high, but without an increase in public or private investment, productivity stagnated and wages rose more slowly than inflation, leaving household incomes depressed.
The Ispending plans were enough to reverse about two-thirds of the real-terms cuts to average day-to-day spending on public services since 2010. However, this achievement is even less significant when the rising population is taken into account. On a per-capita basis, only one-third of the cuts are reversed. The average rise also masks substantial variation within the total.
These are commitments that are likely to limit the scope for further increases in departmental or welfare spending.
The person in the street will be expecting life to be easier. Removal of austerity entails that basic life expectations are now expected. There will be no hardships as the government will be chipping in where it becomes heavy.
As Mthuli explained yesterday the treasury always keeps some cash aside so there is cash kept for the betterment of life as we know it.
Austerity is a self induced suffering meant to make tomorrow better.
As for now Zimbabweans sits in great expectations hoping to see the great times unfold before their own eyes.