Zimbabwe News and Internet Radio

ZCTU says budget has nothing for workers

Press statement by the ZCTU

The much awaited 2011 budget statement has left workers with a sour taste in the mouth after the Finance Minister failed to incorporate submissions of labour that were meant to alleviate suffering of the country’s workforce. Labour sees International Monetary Fund and World Bank influence hence the proposed budget is nothing short of being capitalist and therefore not pro-poor.

The Zimbabwe Congress of Trade Unions takes note of the attempt by the Minister of Finance to effect some changes. The adjustment of the tax free threshold from $175 to $225 is a slap in the face for workers who were expecting a meaningful review of the threshold towards non-taxing of those earning at or below the Poverty Datum Line (PDL) that currently stands at $496.

The ZCTU is worried that Value Added Tax and individual tax remain the main sources of revenue for the government. Instead of taxing businesses who are into business to make profits, government continues to hammer the workers with high taxes of up to 35 percent. It is ironic that mining royalties on gold and platinum for example, have been increased to a measly 4.5 percent and 5 percent respectively.

The Minister is lying to the nation when he says the measures he has introduced will impact positively on the purchasing power of tax payers. This is because the tax bands have not been adjusted and the highest taxed worker is still being taxed at a punitive 35 percent. The ZCTU position is that bonuses should not be taxed at all and consequently the adjustment of tax free bonus to $500 has little effect on the pockets of workers.

We also take note of the proposed increase to the remuneration of the civil service but labour is worried that there have been no attempts to flush out the thousands of ghost workers in the civil service. An audit did take place and the Ministries that have the bulk of ghost workers were identified and we wonder what is stopping the authorities from weeding out these people. The proposed 100 percent salary hike for public sector workers is sickening when one takes into account the fact that its inclusive of all other obligations such as pensions.

The Minister also proposes to convert to defined contribution pension scheme from the current defined benefit for the civil service. This proposal is not only mischievous but also scandalous. ZCTU is actually advocating for a move from defined contribution to defined benefit.

The ZCTU demands that Members of Parliament critically look at the proposed budget and not just rubber stamp the proposals as is the norm. In the meantime, the ZCTU will be consulting with its membership on the way forward in view of this largely IMF/World Bank influenced anti-worker budget and at the same time maintaining its call that those earning below PDL should not be taxed.

Wellington Chibebe, Secretary General, Zimbabwe Congress of Trade Unions (ZCTU), 26 November 2010.