Budget: The Political Context

There is a pall of uncertainty that hangs in the air, and really speaking whatever scenario one comes up with will only be pure speculation, with no real basis to make any objective projection of how things will shape up. Indeed, much water will flow under the bridge between now and the time when the writ of the next general elections is issued

The focus of our major political parties in the coming months will be on winning the next general elections – at any cost. Budget 2018-19 and the next one that will come in June 2019, which it is safe to assume will be more voter-friendly, have to be seen in that perspective. The question however is whether these popular measures and more to come will improve the political fortunes of the MSM-ML government?

There’s been talk of things brightening up in the months ahead. The Budget itself refers to the “improved and sustained performance slightly above an average growth rate of 3.6 % noted over 2012-2016,” and which is mainly due to an “uptick in investment, sustained surges in final consumption expenditure (both by households and by Government), and enhanced business confidence, leading to the unemployment rate dropping to 7.1 %”. There’s also the first phase of the Metro Express which will be completed in September 2019, and infrastructural works going on apace. Some commentators have argued that it shouldn’t be that difficult for the government to post a satisfactory economic report sheet come 2019.

All that is well and good, but it’s without considering the fact, as can be anticipated, that the opposition will give no quarter to the government on all fronts. This is exactly what former Finance minister Rama Sithanen attempts to do in this week’s interview to this paper (although he concedes that there are some “good social measures” in the 2018-19 budget) by hitting, firstly, at one of those things that this budget will be remembered for: the highly controversial measure to offer to high net worth individuals the possibility to acquire the Mauritian passport and/or nationality against a non-refundable contribution to the Mauritius Sovereign Fund. Secondly, by taking a shot at what in opposition ranks (in particular in the Labour Party’s perspective) is meant to humour a large section of the LP’s vote bank – the middle income group, with the reduction in the income tax rate from 15% to 10% for those earning between Rs 305,000 and Rs 650,000 per annum.

Mr Sithanen’s take on the Mauritian passport and nationality issue adds up to the large body of criticisms that have already been voiced out in different quarters, and can be summed up, in his own words, as “a desperate attempt by the PM’s spin-doctors to find a ‘wow measure’ for the budget that would attract attention… (but which does him) a major disservice”. As for his stand on the 10% tax for the middle income group, he said he would be surprised – on the basis of hard facts – “if the number of beneficiaries exceeded 25% of the 60,000 employees stated by the Prime Minister. Equally those who will benefit will save far less than Rs 18,000 per annum. On average I would not put it at more than 20% of Rs 18,000, if not lower.”

Time will tell whether the economic spokesperson of the Labour Party is countering propaganda with his own brand of propaganda couched in a sharp technical analysis backed by facts and figures. But he is absolutely right to assert that “people may easily forget the short-term goodies if the economy does not perform well, good and smart jobs are not created, if insecurity rises, income, wealth and asset inequality widens to unacceptable levels and there are major issues with respect to corruption, governance, nepotism, drugs and abuses of power in recruitment and promotion”. The more so given the uphill task the present Prime Minister has to face as he tries to reverse the multiplicity of blunders that have marked the Lepep government since 2015 until he took control as PM and initiated a departure from the earlier style of governance (of SAJ) and which would have brought the government straight into the precipice. This is the political context in which the initiatives of the present Prime Minister, and incidentally this year’s budget, have to be looked at.

It is undeniable that he has inherited a government which has been rocked by its own people in their obsessive pursuit to finish off the Labour Party and its leader – mostly the latter. To this end, there was an abusive utilisation of power to track down and silence opponents though an equally abusive use of provisional charges. It was kickstarted by the mishandling of the BAI and of Betamax affairs, whose complex ramifications have ensnared the government in labyrinthine, protracted procedures with no early end in sight. To this must be added the idea of coming up with a Prosecution Commission, to tame what must have been perceived in the government as a “hostile” DPP.

The sequestration of the Swiss representatives of Dufry complicated matters further, and the death threat against Xavier Duval levelled by a Vice Prime Minister created climate of fear. All of these together and more have seen the Lepep government tumbling down fast in the people’s esteem. Regaining it is going to be an uphill task.

The question therefore is whether the package of measures in this budget and in the next one can redeem this government, or is it a political alliance with the MMM that will do the trick? On the other hand, one may justifiably ask whether the leader Paul Berenger would risk going it alone, face another defeat (eighth one) but ensure survival and better prospects in later elections for his party and those who will take over the MMM’s leadership from him.

As at present, therefore, there is a pall of uncertainty that hangs in the air, and really speaking whatever scenario one comes up with will only be pure speculation, with no real basis to make any objective projection of how things will shape up. Indeed, much water will flow under the bridge between now and the time when the writ of the next general elections is issued…

 


Published in the print edition on 22 June 2018

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