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12 Major Failures of the Sithanen Budget: Economic and Social Ruin Looms Large

10.06.2006

1. While noting the three economic "cyclones" hitting Mauritius, and acknowledging that the major problem that will face the people, as a result, is unemployment, the Sithanen budget neither places the blame for the crisis on the bourgeoisie which failed dismally to anticipate the eminently predictable "cyclones" nor does it make any real provision for creating work. All Finance Minister Sithanen does is to make available a bit more money for "micro-credits" and Small and Medium Enterprises, thus attempting to put the blame for unemployment on the working people, the very people who were not responsible for the crises. And then he says he hopes that foreign investors will "respond positively rapidly and significantly" to all that he has done to "open the economy", and presumably what he is promising to do in terms of making workers more easily "re-cycleable". In other words, he relies on wishful thinking for job creation. This is a serious "demisyon" relative to his responsibility as an elected representative of the people. It is particularly irresponsible of him, when we see the social problems already getting completely out of hand, especially in the countryside where unemployment has rocketed already. Keeping people working until 65 years old will increase the unemployment problem dramatically.

Minister Sithanen skips quickly over the sugar and cane sector, which he will be financing heavily in order to help them destroy jobs, instead of on the condition that they diversify and create jobs in large numbers and fast.

2. There is no land reform in the budget. People who want to plant diversified food crops, that can be processed for export, have still got no access to land. Those with land insist on keeping it under cane, and the Government is helping them do this and helping them tie small planters in to this ailing industry. So much for "democratising" the economy. The land will be left in the hands of those who have no intention of utilizing it optimally nor for job-creation. Instead of using land for agriculture (and its industry), at the most Sithanen encourages speculation by his extension of the Integrated Resorts Schemes

3. There is no Government intention to encourage a massive fishing industry and fish-farming, which could create hundreds of jobs, and do it fast. The only reference is to the free zone type project known as "sea food hub", which gets a mention.

4. There is no measure to ensure massive agricultural diversification nor agro-industrial production and processing for export.

5. There has been no sign of any attempt to regain control of foreign exchange, so as to prevent the private sector continuing provoking decreases in the value of the rupee. Nor has there been any attempt to control prices of the basic necessities of life of the working people and the unemployed.

6. There is no provision for any type of unemployment benefit or RMI, which is essential to cushion the effects of the easy "hire and fire" concept that Mr. Sithanen is encouraging. There is not even provision for paying people's NHDC housing repayments when they get sacked, which will produce grave social problems under the new regime of labour flexibility and short-term work contracts that the budget speech applauds.

7. The budget has failed dismally in maintaining the economic and social rights gained since Independence. The rice and flour subsidy is going. Examination fees will now be subject to means-testing, thus re-introducing two types of student in the class-room. The exam fee money could easily be clawed back from the rich by adding to their income tax, just as Mr. Sithanen will do for the National Residential Property tax, or as he will do, inversely, when he will subsidise CEB bills of the poor, to compensate for the loss of the rice and flour subsidy.

8. Instead of admitting the ravages the people are suffering through Chikungunya, and spelling out the economic risks as well, he wants to put an end to the epidemic without spelling out its widespread nature. In fact the only way to deal effectively with epidemics is through truthful, scientific information out in public, so that people can participate in eradicating the illness.

9. There is no provision for social housing in the budget. Instead of a mass program of housing for the homeless and those living in terrible over-crowding, there is just another "sites and services" plan as part of the "Empowerment Programme".

10. Roads are clogged up, and Port Louis is almost impossible to get through at times, and yet Minister Sithanen has lowered tax rates on private cars in order to make them more affordable. This will increase their number, and the Finance Minister does not make any provision for a plan to deal with the impossible road traffic situation.

11. The rich are being significantly de-taxed by the budget. There is to be a decrease in the top bracket income tax right down to 15%, and the same reduction for Corporate Tax, over the next three years. This is shocking, when one witnesses the plight of the working people and the unemployed.

12. "Offshore" businesses here, as elsewhere, continue completely untaxed by Governments.

Lindsey Collen
for LALIT
9 June 2006