Economy

MBABANE - Cabinet is expected to consider the national budget today, with the Minister for Finance, Neal Rijkenberg, warning that difficult trade-offs remain unavoidable.

He mentioned that this is because government does not have enough money to meet all competing needs.

Rijkenburg said the budget process is at an advanced stage and that approval by Cabinet would pave the way for the annual budget speech, expected towards the end of February.

The exact date, he said, will be announced in due course.

“We are in the middle of our budget process, hoping that Cabinet will approve it tomorrow (today) and we will then take it through the rest of the process,” Rijkenberg said during his weekly Finance in Focus address.

The minister said officials were grappling with how to allocate limited resources in a way that would both meet pressing needs and support economic growth.

“It is very difficult to allocate resources properly because we don’t have enough money for everything. It is a matter of giving the right amount of resources that we have available to the right place and doing those allocations correctly,” he said.

The minister said government would do its best to present a budget that will balance fiscal discipline with developmental priorities.

“We’ll do our best to bring a budget that is at least going to try and fulfil the needs and to have our country grow at the same time,” he said.

The minister also reiterated government’s intention to tighten tax compliance in the retail sector, with a particular focus on value-added tax (VAT). He noted that while some retail companies paid tax very well, many others were failing to remit VAT properly, despite collecting it from consumers. “VAT to turnover should be around three per cent if it’s a healthy business operating, but unfortunately, for many companies it’s zero, meaning there’s something very wrong,” he said.

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… defends electricity tariffs, urges households to use less power

MBABANE - Finance Minister Neal Rijkenberg has defended the recent rise in electricity tariffs, saying the increases were driven by external factors and warning against subsidising power prices with taxpayers’ money.

Speaking during his weekly Finance in Focus address, Rijkenberg acknowledged that the double-digit tariff hikes were a very tough pill to swallow for households and businesses.

“All of us use electricity virtually, and we’re all subjected to this increase. It really is brutal on the household level,” he said.

He said government had limited control over the rising cost of imported power, which had become more expensive over the past few years. “It really isn’t the government necessarily doing this. It is external factors,” he said.

Rijkenberg said while government had explored local power generation for many years, it had previously been cheaper to import electricity. That balance, he said, had now shifted, making domestic generation more viable. “You’ll see a whole lot of power purchase agreements being issued by the government,” he said.

He rejected calls for government to subsidise electricity prices, saying such a move would be unfair and fiscally irresponsible. “The money doesn’t fall out the sky. The money comes from the taxpayer,” he said. “To use taxpayer’s money to subsidise electricity prices, we will be doing something that’s principally wrong.”

He said utilities should operate on a ‘user pays’ principle, where those who consume more electricity pay more. “If I as Neal Rijkenberg use more electricity, I must pay more. And if someone is using less, they must pay less,” he said.

*Full article available on Pressreader*

Minister for Finance Neal Rijkenberg. (File pic)