Docstoc

The 200203 Budget

Document Sample
The 200203 Budget Powered By Docstoc
					National Budget 2004/05

A presentation by the Institute for
     Public Policy Research
        26 March 2004
       Budget Information


• MoF documents excellent

• But what about development budget?

• Internet Age?
          Election Fever?
• Theory linking political to economic
  cycle
• Interest rates and populist spending
• Namibia’s political cycle linked to South
  Africa’s
• Evidence in Namibia?
               Evidence?
•   Lower taxes? No!
•   Higher deficits? No!
•   Higher unauthorised spending? No!
•   Expenditure sweeteners? Maybe a little
    (Peace Project in 1999 and pensions in
    2004)
           Good or Bad?
On the one hand:
• Responsible fiscal management rather
  than economic populism
On the other:
• Suggests budget is completely isolated
  from political process – it simply doesn’t
  matter
        Revenue Highlights
• Individual income tax down from N$2.7 billion
  to N$2.6 billion
• Diamond mining tax down from N$220 million
  to N$52 million
• Other mining tax down from N$20 million to
  just N$15 million
• SACU revenue up from N$3.0 billion to N$4.2
  billion!
• Overall revenue increase from N$10.8 billion
  to N$12.1 billion
 Chart 1: Changes in revenue estimates
 % change in revenue over previous budget

 25%

 20%

 15%

 10%

  5%

  0%

 -5%

-10%
        90/91

                91/92

                        91/92

                                92/93

                                        92/93

                                                93/94

                                                        93/94

                                                                94/95

                                                                        94/95

                                                                                95/96

                                                                                        95/96

                                                                                                96/97

                                                                                                        96/97

                                                                                                                97/98

                                                                                                                        97/98

                                                                                                                                98/99

                                                                                                                                        98/99

                                                                                                                                                99/00

                                                                                                                                                        99/00

                                                                                                                                                                00/01

                                                                                                                                                                        00/01

                                                                                                                                                                                01/02

                                                                                                                                                                                        01/02

                                                                                                                                                                                                02/03

                                                                                                                                                                                                        02/03

                                                                                                                                                                                                                03/04

                                                                                                                                                                                                                        03/04

                                                                                                                                                                                                                                04/05
Source: Budget and additional budget documents
               Revenue



Overall increase of N$1.3 billion – what to
 do with it?
                     The Big Picture

 • Where do we stand with our fiscal
   targets set in 2001?
                        Target        Latest estimate (2003/04)
Public expenditure           30%                           36.1%
Budget deficit                   3%                          4.2%
Stock of public debt         25%                           30.3%
      Has MTEF Helped?
               01/02   02/03   03/04   04/05   05/06   06/07
MTEF 2001/02
 Revenue       31.3%   31.0%   31.4%
 Expenditure   34.9%   33.9%   34.3%
 Deficit        3.6%    2.9%    2.9%
MTEF 2002/03
 Revenue               30.1%   28.1%   26.5%
 Expenditure           34.5%   31.1%   29.0%
 Deficit                4.4%    3.0%    2.5%
MTEF 2003/04
 Revenue                       30.4%   28.3%   26.7%
 Expenditure                   33.4%   31.6%   29.7%
 Deficit                        3.0%    3.3%    3.0%
MTEF 2004/05
 Revenue                               32.3%   28.3%   27.3%
 Expenditure                           33.8%   29.6%   28.3%
 Deficit                                1.6%    1.4%    1.0%

 Revenue       32.3%   33.5%   31.9%
 Expenditure   36.6%   36.2%   36.1%
 Deficit        4.3%    2.7%    4.2%
        Has MTEF Helped?
• Actual revenues higher than in MTEF
• Actual expenditure higher than in MTEF
• Actual deficits higher in two out of three
  years
• Actual trends point other way
• Very ambitious new targets
 Are we serious about targets?
 Not really - probably because
we can see the costs but not the
            benefits.
Chart 2: Changes in expenditure estimates
% change in expenditure over previous budget


 25%


 20%


 15%


 10%


  5%


  0%


  -5%


 -10%
        90/91

                91/92

                        91/92

                                92/93

                                        92/93

                                                93/94

                                                        93/94

                                                                94/95

                                                                        94/95

                                                                                95/96

                                                                                        95/96

                                                                                                96/97

                                                                                                        96/97

                                                                                                                97/98

                                                                                                                        97/98

                                                                                                                                98/99

                                                                                                                                        98/99

                                                                                                                                                99/00

                                                                                                                                                        99/00

                                                                                                                                                                00/01

                                                                                                                                                                        00/01

                                                                                                                                                                                01/02

                                                                                                                                                                                        01/02

                                                                                                                                                                                                02/03

                                                                                                                                                                                                        02/03

                                                                                                                                                                                                                03/04

                                                                                                                                                                                                                        03/04

                                                                                                                                                                                                                                04/05
  Source: Budget and additional budget documents
       Expenditure Highlights
• Severe expenditure restraint 3.7% while
  inflation is expected to average 6.5%
• Slight fall in assistance to political parties in
  election year
• No National Emergency Disaster Fund but
  maintained Contingency Fund
• AA Loans doubled to N$26 million
• N$50 million for land purchases
• N$366 million for Air Namibia (AN04)
• N$160 million for Liberia
                          Pension
• Welcome increase from N$250 to
  N$300 per month
• But only catch up and not enough!
                    1990/91            2003/04          % Increase
Windhoek interim              100                337            337%
CPI
Pension                     N$92              N$310
GDP                N$6,545 million   N$33,941 million          543%
Pension                     N$92              N$499
GDP per capita           N$4,538           N$19,362            395%
Pension                     N$92              N$363
 Does Budget Help Poorest?
• Reduction in primary education
• Reduction in primary health care
• Increase in pension but reduction in
  maintenance grants and FP
  allowances?
• Increase in Combatting of Crime
             Key Issues
• Across-the-board measures no
  substitute for analysis and priorities
• MTEF must show what does and does
  not work (outcomes)
• Diamond revenues clearer
• Proliferation of levies and funds
• Need clear policy on welfare grants
             Summing up
• Welcome technical measures debt and
  tax
• Technocratic budget with little to excite
  voters
• Pension increase welcome
• Missed opportunity to balance budget
  but reduced deficit is positive
• Await additional budget

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:7/24/2012
language:
pages:18