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AfricaMoney | October 19, 2017

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How Budget 2014 scores on the common man’s expectations

How Budget 2014 scores on the common man’s expectations

AfricaMoney brings to you in-depth insights into the performance of the government in Budget 2014 against the expectations of the common man, identified through our Budget Expectations Survey conducted last month. (Image: Yashvin Awootar)

So, now that the Budget is in and we are all aware of the key points, would you like to know what’s in it for you? AfricaMoney brings to you in-depth insights into the performance of the government in Budget 2014 against the expectations of the common man, identified through our Budget Expectations Survey conducted last month.

Take 1:

What the people said: Down with corruption!

What the government plans to do:

  1. More transparent financial reporting for public sector enterprises: Admitting to a number of shortcomings in public sector management, the government expressed its commitment to addressing these issues by setting up an independent Board of Enquiry.
  2. Move public services online: The government will provide efficient and effective delivery of public services through the Civil Service Modernisation Programme, including extensive use of latest technology for the delivery of public services. Also, the National Transport Authority will, by the end of this month, propose on-line payment for parking fines and for applications for vehicle license plates.
  3. Greater transparency in education: The government is introducing an Independent Rating System for its tertiary education faculties, which will be made public to promote fairness.
  4. Make social impact measurable: A new financial instrument that will reward NGOs upon delivery of results, Social Impact Bonds can be expected to prevent diversion of funds from social welfare to company coffers.
  5. More transparent payment of utility bills: By introducing prepaid electricity meters, the government has done away with the hassles of onsite meter inspection. Also, this would ensure more transparent payment of electricity bills, and prevent officials at the Central Electricity Board (CEB) from taking a discretionary stance on terminating electricity supply to households for non-payment of bills.

AfricaMoney view:

How the government scores on tackling corruption: Poor

We feel the government has not done enough to tackle corruption in day-to-day matters. While they have lofty ideas on how to improve public sector management and make social impact measurable, there is no penal measure that seeks to dis-incentivize corrupt institutions and individuals from soliciting underhand bribes. A harsh crackdown on such offenders is the only way out of the maze of corruption that traps Mauritian citizens into greasing palms to get their rightful work done. The common man must have a forum to redress his grievances and ensure that strict laws are promulgated in line with actual issues faced on the ground.

 

Take 2:

What the people said: Support growth and create employment:

What the government plans to do:

  1. Offer career-oriented educational opportunities: Eight existing secondary schools to be turned into specialized language schools, as mastering foreign languages is expected to be key for jobs in emerging sectors. Also, to help students plan their careers in areas that will be in demand, ICT being one of them, the finance minister has provided for 8 additional National Scholarships for ICT.
  2. Match industry demand and supply: The government will conduct Employment Trends Surveys on six-monthly basis to inform the youth on career opportunities. Also, to smoothen students’ transition to work, the government is setting up a Dual-Apprenticeship Scheme with a good mix of practical experience and classroom studies. Moreover, the government has committed another Rs 275 million to continue the Youth Employment Programme (YEP) in 2014.
  3. Support working women: The government plans to institute a ‘Back to work’ program for women with an investment of Rs 100 million.
  4. Network with African countries for ‘borderless’ employment: The government will be promoting placement of local technicians, graduates and professionals on the African continent through the Africa Center of excellence.

AfricaMoney view:

How the government scores on generating more jobs for its people: Moderate

We feel that while the government has taken adequate steps to boost employment, an important area where nothing has been done is student loans. The MTPA had requested for additional exemption for dependent children pursuing undergraduate courses for Rs 100,000 in 2014 in place of Rs 80,000; and, for overseas courses, additional exemption of Rs 150,000 for 2014, instead of Rs 125,000. Also, including new subjects at school centered on important economic concepts such as Maurice Ile Durable and the ocean economy is essential to ensure that jobs created in these sectors are met through domestic supply of skilled labor.

 

Take 3:

What the people said: Give a boost to ICT sector to power the economy

What the government plans to do:

  1. Reduce prices to encourage adoption of the internet: The government declared that tariffs for International Private Lease Circuits will be reduced by another 16 per cent from January leading to to a total cut of 80 per cent since 2005.
  2. Encourage early adoption of technology: The government will invest Rs 87 million next year to provide free WiFi connectivity in all public and private aided secondary schools. Also, Rs 243 million has been allocated to supply digital tablets to form IV and V students in public and private aided secondary schools, starting 2014.
  3. Boost connectivity with the African Continent: To enhance internet connectivity with East Africa, a cross-connection of the LION and SEAS fibre optic cable systems will be established between Mauritius and Seychelles.
  4. Supportive infrastructure: In July 2013, the government set up the Ebene Accelerator, a state-of-the-art facility which allows young applications developers to code, grow and become an integral part of the new internet economy, and is now providing for a second Accelerator in 2014 in Port-Louis.
  5. Get all SMEs online: The government will provide a free basic website to all SMEs while more elaborate websites (costing up to Rs 6,000) will be given a subsidy of 50 per cent. Moreover, these websites will be provided through the Ebene and Port Louis Accelerators, thus giving a dual thrust to technology providers on one hand, and SMEs on the other.

 AfricaMoney view:

How the government scores on giving a boost to the ICT sector: Good

We feel the government has tackled the ICT sector at both ends – technology providers as well as small enterprises. Besides, reducing tariffs and setting up stronger fibre networks to boost connectivity and internet speeds are some of the weighty measures that contribute to a good scorecard for the government on this parameter. However, monitoring the use of technology by students and ensuring that the youngsters access only educational and supportive content remains a grey zone.

 

Take 4:

 What the people said: Increase purchasing power

What the government plans to do:

  1. Increase in income tax exemption threshold: Income tax thresholds across the board are being increased by Rs 5,000 respectively. This will have an immediate, although marginal, impact on purchasing power of households by reducing the tax outgo.
  2. Increase in basic monthly pension: The government declared an increase in the basic retirement pensions by 3.7 per cent, only slightly higher than inflation.
  3. Lower tax on essential consumption items: For tea, milk, butter, cheese, curd, honey, soya beans, spices, rice, ham, sausage, buttermilk, and canned or preserved meat, the MRA will refund VAT on all inputs to producers, reducing prices of locally produced goods by an equivalent amount. Finally, VAT stands abolished on health-related items such as medical, surgical and laboratory sterilisers; X-ray films and photographic plates for medical purposes; and bio-pesticides.
  4. Make housing cheaper for middle income families: Banks will be allowed to claim a down payment of only 5%, instead of the existing 10%, on home loans availed by middle income families while housing loans will now carry a moratorium of 2 years on capital repayment. Altogether, the cost of a house or apartment is expected to come down by Rs 450,000.

 AfricaMoney view:

How the government scores on making your wallet go a longer way: Moderate

On the direct tax front, the government fails to deliver with a tax exemption threshold increase of only Rs 5,000 across the board. The MTPA had requested an increase in income tax threshold by Rs 10,000, while the common man had echoed MTPA’s request and also expressed the view that the government give greater weightage to those retired or with higher number of dependents. Finally, an increase in the monthly pension that is only marginally higher than prevailing inflation rates is hardly likely to free purchasing power of the elderly and the retired.

 

Take 5:

What the people said: Focus on sustainable development through Maurice Ile Durable (MID)

What the government plans to do:

  1. Greater government investment in MID projects: The government has committed a total of Rs 6 billion for implementing a broad spectrum of MID-related projects on renewable energy, protection of lagoons and acquifers, sustainable food production and rehabilation of nature reserves and parks.
  2. Renewable energy focus: In a two-pronged approach, the government is promoting renewable energy generation through greater investment, even as it dis-incentivizes people from using energy inefficient equipment through higher taxes. So, on one hand, investments in solar and wind projects will inject some Rs 5 billion in the economy while on the other, the government has extended excise duty on energy inefficient products to cover air conditioners, tumble dryers and electric lamps.
  3. Disincentives on environmentally degrading products: Some key measures are increasing the excise duty on tobacco products, including cigarettes, by 5%, introducing a 30% VAT on fire crackers and fireworks, and encouraging fewer cars per family by increasing registration duty by 30% on motor vehicles, except motor cycles of capacity upto 250 cc. Besides, to ensure lesser environmental degradation by motor vehicles, the CO2 emission threshold is being lowered to 150 gramme per kilometer.
  4. Recycling program for plastic bottles: Providing Rs 30 million for a financial incentive to encourage the collection and re-export of PET plastic bottles.

 AfricaMoney view:

How the government scores on promoting sustainable development: Good

The government has kept the concept of Maurice Ile Durable at the forefront of its budget directives. Be it disposal and management of solid waste, or investing in green energy, the government has risen to the challenge of ensuring that the environment is not forgotten as the island moves from a middle-income to a high-income economy.

So, let us know what YOU think of the government’s performance in Budget 2014. Poor, moderate or good?

-          From the editor’s desk, with inputs from Gunadevi Chengalaram, Marie-Lorry Coret and Tooshalsing Ramdhony

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