03 Feb 2025

Fiscal policy which covers taxes, subsidies and social spending is a powerful weapon in the fight against poverty and inequality.

Speaking during the Parliament budget analysis seminar, Southern African Parliamentary Support Trust (SAPST) official, Mr John Makamure said although the combination of tax and spending policies reduced inequality, levels of poverty on the other hand meant a low revenue collection crisis which limited fiscal redistribution.

“In fact, more households pay far more in taxes than they receive in transfers and subsidies, effectively leaving many households poorer than they would be in the absence of any fiscal intervention,” he said.

He said sound, transparent and accountable public financial management was a key pillar of government reforms and of vital importance to provide public services of good quality to citizens as well as to create and maintain fair and sustainable economic and social conditions.

He thus indicated that the forthcoming budget was the most important economic instrument for government as it reflected the country’s socio–economic priorities by translating priorities and political commitments into expenditures.

To that effect, Mr Makamure urged Members of Parliament to provide financial accountability through scrutinising government spending by highlighting waste within publicly funded services.

He indicated that accountability played an important role in the public sector as it was about giving an answer for the way in which one had to spend money in practicing mediated rights and discretions vested by the law in the public interest.

“One of the key roles of legislators should be to improve the economy, efficiency and effectiveness of government expenditure and enforce public accountability through effective participation in the budget process,” Mr Makamure said.

He said public accountability or social accountability pertained to the obligations of persons or entities entrusted with public resources to be answerable for their fiscal, managerial and programme responsibilities that have been conferred on them.

“The International Monetary Fund (2021) argues that budget execution as a process led by the Executive must be done in line with prescripts governing the principles of checks and balances,” he said.

Despite being a tool used by government to realise economic growth and development goals, Mr Makamure said government budget should also be channelled to promote a certain level of employment, stability in prices, economic growth, environmental sustainability and external balance.

“The budget is the most important government economic instrument as it reflects the country’s socio-economic policy priorities by translating priorities and political commitments into expenditure,” he said.

Similarly, he cautioned that the lack of effective budget oversight mechanisms could impact negatively on budget execution leading to unmitigated budget deficits and poor service delivery.

Mr Makamure stated that the budget allocation process was a political issue thus understanding the institutional and political context in which budget decisions were made and implemented was critical for achieving better outcomes.

He indicted that budgeting was not only a technical exercise but rather an arena of political completion through a complex interaction of ideas, institutions and interests with contested and diverse stakeholders capable of facilitation or resistance. ENDS