The log in govt�s eye
Mmegi Editor | Tuesday October 14, 2014 08:00
Even prior to the 2009 global recession, the high priests of this paradigm change constantly preached the urgent need for budgetary change and indeed many of us were converted.
During and after the recession, we became accustomed to the impact of lower budget revenues, which included the suspension, deferral or termination of projects. Every sector of the economy has been affected by the smaller budgetary cake, with civil service wage stasis, public service recruitment freeze and restrained growth in private sector procurement.
The criteria for tertiary level sponsorship has been tightened beyond what the majority can attain, while the sustainability of universal access programmes in critical sectors such as health has become precarious.
More for less has been Kenneth Matambo’s rallying call since the recession and we have accepted the baptism of fire from the high priests because it was evident that new thinking was required.
It however, appears that as a nation, we have not all been singing from the same hymn book. Data released yesterday indicates that the travesty that is budgetary underspending within line ministries continues unabated.
In 2012/13, the development budget was underspent by P1.08 billion or 11.5 percent of the revised budget, while in 2013/14 the figure was about P250 million. The major cause of the underspending – fiscal authorities have said – is the non-completion of budgeted projects as well as over-budgeting.
On the surface, underspending may appear a benign by-product of the budgeting process, but in reality it represents both a gross opportunity cost and a dereliction of the public service the budget is supposed to achieve.
When projects lie incomplete, public and private sector jobs are placed under pressure, while investors are dissuaded by the uncertainty. This is occurring at a time when unemployment continues to stalk our youth.
In addition because of underspending, ordinary citizens are denied access to the various basic rights and benefits the projects would have brought which include electricity, water, telecommunications, sanitation, education, health and others.
When the same projects are brought forward into the next budget, the taxpayer shoulders the inflationary burden associated with the previous year’s underspending.
That each year we have both underspending and the need for supplementary budgets is an oddity only fiscal authorities can explain.
As line ministries and the Finance Ministry prepare the 2015/16 budget, Matambo’s successor needs to attend to the log in government’s eye and ensure that the only underspending that occurs is as a result of optimised and prudent cost-cutting to enhance efficiency.
Today’s thought
“In all areas, the limited resources available to government must deliver more with less. Every Pula of Government spending must create more than a Pula worth of added value.”
- Kenneth Matambo (Budget Speech 2010)