Fiscal and Monetary Policy – Government Stealing from the Poor

The Zimbabwe Congress of Trade Unions (ZCTU) is deeply disappointed by the measures announced by both fiscal and monetary authorities that will worsen the plight of workers and Zimbabweans in general.

The new measures, instead of solving the economic crisis that the country faces, increases taxation and fail to find solutions to the cash crisis and high price of goods and services amongst a host of issues affecting workers and the general public.

The ZCTU is concerned with the introduction of a two percent tax on every dollar on all electronic transactions which has a direct effect of overburdening the already overtaxed and underpaid workers. The people have no option but to be bled by this move which would also create a fertile ground for a multiple tier pricing system that spurs the cost of living as retailers and service providers would pass on the costs to consumers.

We are chiefly frustrated with the policy directive of separating the Foreign Currency Account (FCA) from the Real Time Gross Settlement (RTGS) accounts which amounts to treachery by the monetary authorities who assured account holders that the US dollar was equal to the bond note. Workers and individuals who had earned their salaries in US DOLLARS are bound to be prejudiced by the distinction of accounts. There is also a huge possibility of salary distortions, erosion of workers’ contributions that were made in US dollars from 2009 and mortgages hovering over. This has created serious uncertainty amongst workers reminiscent of the 2008 savings plunder whereby investments and pensions were eroded.

The ZCTU believes the government should have come up with strategies that reduce state extravagancy than to further tax a highly taxed nation. Our taxes should be used to finance social security systems that benefit the poor but over the years the government has borrowed to finance recurrent expenditures and now expects the public to pay back a debt that benefitted a few individuals.

We remind the monetary authorities of our reservations on the unilateral introduction of bond notes. Labour had proposed adoption of the Rand which could be ‘realistically’ rated against US dollar and could restore measurable value but the authorities insisted on taking the ‘poisoned chalice.’

As ZCTU we believe the monetary authorities and the finance minister have made a false start and should be urgently recalled for setting dangerous precedents that do not protect the poor and vulnerable. We demand that the taxes be reviewed downwards and better and sensible solutions be drawn through dialogue by all stakeholders.

Japhet Moyo

Source: Zimbabwe Congress of Trade Unions (ZCTU)

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