Summary of the austerity measures
FINANCE Minister Moeketsi Majoro proposed several measures to rein on government spending and ensure greater fiscal discipline.
Apart from the various taxes on alcohol, tobacco, fuel and value added tax on telecommunications, Dr Majoro proposed a five percent salary cut for cabinet ministers as well as cutting back on their costly foreign trips.
The 2019/20 budget was presented against the background of what Dr Majoro described as “external shocks (to the country’s economy), largely emanating from the downturn in the South African economy and its impact on Southern African Customs Union (SACU) receipts”.
The budget was also presented against the government’s ongoing negotiations with the International Monetary Fund (IMF) and other development partners for a financial bailout package.
The government and the IMF have been in discussions since June 2018 for the bailout which will help to reduce the budget deficit and boost foreign currency reserves.
So far, a deal has been elusive and the IMF has consistently pointed to the government’s failure to rein in on expenditure and the measures proposed by Dr Majoro could go a long way towards meeting the IMF demands.
Below is a summary of the proposals that Dr Majoro presented to parliament:
- There must be a reduction in the ministers’ foreign trips
- Prime Minister Thomas Thabane to set up a special committee to authorise all ministerial foreign trips with the aim of reducing such trips
- The government will use its foreign representatives to attend most meetings abroad
- The ministers will only attend only representational meetings and avoid conferences, workshops and consultative meetings
- Where they have to travel, the ministers will to “cut their delegations to the bone” and also limit the number of nights they spend abroad to just five.
- The ministers will also take on the added responsibility of actively controlling international trips in their ministries
- The ministers will have to produce reports of their international trips, the total time and the amounts spent on travel.
- Except for His Majesty King Letsie III, members of parliament, statutory officers and all public servants will travel economy class
- The government of Lesotho shall contrat one travel agent to provide all its flight booking services.
- There must be a reduction of the government’s telecommunications expenses.
- Communication technology more effectively. The Ministry of Communications, Science and Technology should submit a proposal before end March that includes teleconferencing in districts and overseas and to train all senior officials on modern communication technologies.
- There must be freeze on all government hiring.
- The grounding of the government vehicle fleet should be carried out and the government vehicles should be parked after the working hours.
- Public servants found to be violating this policy will have their vehicles impounded and principal secretaries must take disciplinary action against civil servants found driving government vehicles after office hours.
- Only principal secretaries should be assigned an official vehicle and all other officials below this level should not be entitled to such vehicles.
- Public servants will only be allowed to go for international training programmes if these were wholly funded by development partners as part of the cost-cutting measures.