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Bluff in the Budget

26.03.2015

The article below, by LALIT member Lindsey Collen, was published first in Le Mauricien, on 25 March, 2015.



Bluff in the Budget

The new Lepep Government’s budget has, according to Minister Lutchmeenaraidoo’s own speech, four important aims. Yet, shockingly, none of these aims is backed up by any programmatic measures in the Budget. Instead, the Minister quite blatantly tricks us.

What production does the Budget Propose? None.
1. Mr. Lutchmeenaraidoo deplores that “we have become a nation of consumers and much less a nation of producers of goods and services”. So, what does the budget propose in terms of new production? Strictly nothing. It proposes “PME”s, but this is deceptive because it specifies no “goods and services”. Small enterprises are no more than a description of the size of the unit of production. It is a complete non-sequitur to pretend PME’s can replace, for example, the waning sectors like sugar and textiles. While setting aside Rs10 billion for PME’s, the Minister does not even warn us that 80% go bust in their first four years, leaving families with debts and losing their house through Sale by Levy. The budget also promises “13 employment-rich mega-projects that will be spread across the country. Eight of these projects will be designed on the ‘Smart City’ concept”, so that clearly says EIGHT, whatever the silly phrase “smart city” is supposed to mean. But even this single digit number is not without confusion, and mistakes on arithmetic are serious for a Budget. The Budget reads “These ‘Smart City’ projects include ...” and the ninth on the list is “ix. And 5 ‘Technopoles’”. So, there will be either 8 or 13 of the things that we don’t know what they are. One thing is sure, they are not cities built around production units. They could have been. They could, for example, have been cities that “unlock” all the cane land around them for inter-line food crops, and be built around industrial units for food preservation and transformation for the produce thus produced on the unlocked land. The smart cities could include agricultural polytechnics that draw from modern scientific knowledge and traditional know-how, while observing bio principles. Now that would be a program for “a nation of producers”. But no. The budget uses the word “unlock” to mean no more than that the sugar estate bosses will get permits to convert and parcel off their agricultural land to buyers for a massive profit, buyers who will come and live in these cities that aim to produce nothing in particular.

Few Jobs created
2. The Minister says, “We need to go out of the box if we want to create jobs at a rapid pace.” But, he proposes absolutely no new sectors, because he proposes no new production. The Minister does not even use the words “agricultural diversification” nor “food security”, the two areas where jobs can be created fast. He calls the smart cities “employment-rich”, but gives no indication of how much of what employment. He also proposes expanding the port from GRNW to Baie du Tombeau, without even clearly stating that the Jin Fei and Neotown leases have been or will be rescinded. There will presumably be some employment in the increase in bunkering, and external commerce around the port.

Social Inequality
3. The minister deplores the “gap between the rich and the poor” and mentions “the necessity to place sharing at the centre of our development agenda”. But, most of the tax measures he takes expand the gap between rich and poor. For example, tax alleviation to cover children studying abroad is a donation to the relatively rich families, as is the raising of the income tax threshold. In practical terms, the Budget Speech just pretends “inequality” between classes is the same thing as “poverty” of some people, or even “extreme poverty”. Then the answer is to “eradicate” it. And as for thinking that this can be done by letting the private sector “adopt” 38 pockets of poverty, and do as they wish with them in the short, middle and long term, it is a positively iniquitous idea. More degrading paternalism than this was rare in the 19th Century just after the abolition of slavery. Poverty, the Budget forgets, is the result of unemployment, and badly paid jobs. It’s simple. Inequality is the result of a tiny group of capitalists dictating everything about the survival of the 99% of us. Now, this group of capitalists will “parraine” the poor, and run “smart cities” for the rich. Inequality will be worse.

Privatization hiding in the wings?
4. There is no mention of privatization. But, curiously, there is the aim to set up a Legacy Fund for future generations, where the money will be put when things are privatized. The Appendix then states that the Government will make it easier for State Land to be sold off to the private sector. This is amongst the worst forms of privatization. But presumably there are others in the pipeline, just being hidden from us.

We are not surprised that bosses’ representatives (Raj Makoon and Ahmed Parkar, as well as the sectorial bosses) are pleased with the budget. But for the rest of us, it should be clear that the main thrust of the budget is not in any way going to benefit us through an economic miracle. It’s all bluff.

Lindsey Collen, for LALIT
25 March, 2015