Economists hit-out at politicians benefits

Private business has decried government’s salary reviews for politicians, saying this sets the country backwards and ill-timed.
At the height of an announcement by SAPPI Usutu that the company will be closing shop at the end of January unless they can find a buyer, government responded with a hike in politicians’ benefits perks.
South African Finance Minister Pravin Gordhan last month announced that SACU receipts will be down by E70 billion, saying this will be difficult for the five member states, including Swaziland, until the revenue sharing method is revised.
Swaziland derives about 60% of its revenue from SACU.
It is expected that an MP will be paid on average a gross salary of E40 000, increasing from their previous E29 000.
Federation of Swaziland Employers and Chamber of Commerce (FSE/CC) Chief Executive Oficer Zodwa Mabuza sasid such hefty increments were putting pressure on private business.
“It is normal that in all economies, governments set the tone and private business will be under pressure to match-up.
“You can then imagine the pressure we will have, where in a country of 90 000 people employed, and 30 000 are public servants. There is no doubt that civil servants will seek better packages and the rest in private business will seek the same. What this will do then is that people will have more disposal income, which will trigger higher inflation rate thereby hiking prices and exacerbate poverty levels,” Mabuza said.
She said this action would be felt more by the poor who will not have disposable income to spend on basic commodities.
Another economist who declined to be named, said government’s action is disappointing and questions the leadership’s judgement.
“This is a simply matter which does not even need expert knowledge, any average thinking person would know that in order to spend you have to have the means to sustain yourself.
“I wonder who’s playing tricks here, it is politics or economics? I suspect it is politics. The people who approved this adjustment surely must have known the benchmarks. Let’s say they are informed, or else there a lot of crazy minds.
“From where I stand, this is purely a political move which is not sustainable,” the economist said.
He said, the Southern Africa Customs Union (SACU) receipts aside, countries guarantee their own income.
“There are individual taxes like pay-as-you-earn and corporate taxes which are dependent upon people being in employment and individual companies paying their taxes. The more we have people on the taxable bracket, the more our revenues would be and so are companies. But the picture that we have is that fewer and fewer people are employed and fewer are on the taxable bracket. The taxable bracket in Swaziland is shrinking and investment levels are low, yet our public spending on social sector is on the increase. So if our SACU receipts go down, where is government going to get the money to sustain this expenditure,” the economist said.
The economists say the country is headed to the doldrums, if this position is not reversed.
“Take a look at SIPA, our very own investment unit, where are they going to get the investors when global developments militate against us.
“Europe doesn’t have money to spent but rather sustain their companies and economies. Recovering from the worst recession, they are still skeptical about investing their money into new markets,” he said.
The economist say free primary education was the worst mistake ever committed by this government, saying there was no proper planning for it.
“It was criminal from the onset. How do we venture into such when the signs are already showing that your revenue sources are shrinking?
“The students we produce today are no longer loyal to the country. We spend a lot of money in the education of people who prefer to work either overseas or neighbouring countries and only return when they are about to retire,” the economist said.
The economist said it is even now evident that those who have money decide to skip the border and spend it elsewhere than here.
“We have a challenge to attract big supermarkets as a country like Game, because we are told to be lacking the numbers to support their business,” he said.
Liqoqo chairman Prince Logcogco Mangaliso said he has always held the view that salaries and wages in the country are generally depressed.
“I am of the view that our neighbours pay better than we are in the same positions, but that I am saying not informed of the SACU receipts and other things which I will need to inform myself before passing judgement on this issue,” he said.
The view of economists on the depressed salaries and wages is that we pay what the economy can afford, saying our economy cannot be compared to that of South Africa.
Politicians are expected to get their improved salaries at the end of the month, backdated to April this year.
Some of the benefits are as follows:
Sitting allowance E300/sitting
 Communication allowance E1 000 monthly for MPs E1 000, E9 000 for Ministers
Constituency allowance E2 656.13
Entertainment allowance – E634.25
Car commuted allowance for MP beyond 50km – E9 333.33
Funeral covers and others.