The Herald (Harare)
4 July 2009
opinion
Harare — The State services have been very patient this year, subsisting on their US$100 a month allowances for the first half of the year.
But there is a limit as to how much longer we can expect this patience and dedication to duty to continue.
And, even more important than those practical considerations, there is the question of fairness and natural justice. It is unfair to expect tens of thousands of skilled and professional people to work for very little with nothing more than vague promises of better times ahead.
In just under two weeks, Minister of Finance Tendai Biti will be giving his mid-year review and will be adjusting his budget.
State staff have been promised that this is when announcements will be made on their future pay.
Over the last five months, since the full dollarisation of the economy, the productive sectors of the economy have been growing fast.
And the Zimbabwe Revenue Authority has been out there, making sure that the State gets its share: its percentage of the consumption, through duties and VAT, its percentage of gross earnings through income taxes, and its percentage of profits, through company and financial taxes.
And this revenue has been increasing steadily, so that Minister Biti now has some leeway to pay the very patient State employees more, and hopefully start setting up a proper graded salary structure while he does this.
We do not expect, and we do not believe that State workers expect, that he will be able to pay adequate salaries in July. But we do expect that he will be able to pay quite a lot more than $100.
We hope he will go further. In much of the private sector, there is a general agreement between owners and employees that wages and salaries will rise, and even rise monthly or quarterly, as revenue rises until decent remuneration is possible, before we return to the old pre-inflation annual pay rises.
The State can do the same, Minister Biti can start with a pay rise this month, and give a strong indication of how further rises are possible during the rest of the year. The experience of the private sector suggests this will be accepted, so long as promises of pay rises are honoured on the dates given in the plan. There is a further point that the Minister should consider.
Increasing the pay of the civil servants and the uniformed services, using money collected through taxes, will be a major boost to the Zimbabwean economy, especially now when many local companies have managed to untangle their production lines and can produce goods, if necessary with imported raw materials, at lower prices than the landed cost of imported finished products.
But despite the dramatic increases in production, there is still a lot of unused capacity in many businesses, and in those, and Delta comes to mind, which are looking at the limits of capacity, new investment is being made to expand capacity.
The extra pay of State employees will not be created out of nothing. It will be recycling the taxes from the private sector, pumping back into the economy, through civil servants buying food and the necessities of life, the money that the State took out to run its services.
This extra consumption will allow productive sectors to increase output, and by being able to spread fixed costs over more volume at least contain and hopefully reduce prices.
A fast growing economy will obviously produce more taxes, helping Minister Biti to fulfil his promises of regular pay rises.
At the same time the Minister has to fund many other critical services, but again this in the end involves buying goods and services from Zimbabwean companies, whether that is food for prisoners, blankets for hospitals or textbooks for schools.
The only requirement is that he gets value for the money he spends, on whatever he spends it on, so that taxpayers know their tax dollars are producing the best possible result, without waste.
A growing economy and some tough action by Zimra has "harvested" the Finance Minister enough money to spend on better pay and better services.
We, no less than his employees, look forward to seeing promises he has made over the last few months being at least partially fulfilled, with a strict timetable given for full recovery of State services.
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