STATEMENT BY THE RT HON PRIME MINISTER
DR B.SIBUSISO DLAMINI
AT THE OPENING OF THE RETREAT FOR CABINET MINISTERS
AT THE PIGGS PEAK HOTEL
TUESDAY 10 JANUARY 2017
Honourable Deputy Prime Minister
Honourable Ministers
Secretary to Cabinet and Principal Secretaries
Retreat Resource Persons
Representatives of the Media
Ladies and Gentlemen
I start today by wishing His Majesty the King, and Her Majesty the Queen Mother and the Swazi Nation a happy, healthy and productive new year. We thank the Almighty for a peaceful festive season. I warmly welcome all present to the Cabinet retreat of 2017.
For the past few years the Retreat has been a mandatory item on the annual Cabinet calendar. And for very good reason. As Prime Minister I have a responsibility, together with my Cabinet colleagues, for the administration of His Majesty’s Government. It is essential that, periodically, we review progress in our respective programmes and plan ahead into the foreseeable future. A week-long retreat away from the distractions of day-to-day business is the perfect setting for such an exercise.
If every burning issue were to be included in the Retreat Agenda we would be here for considerably longer than the period allotted. This requires us to focus on the priorities of the present time. Clearly these must include, in broad terms, Government’s fiscal position, the rate of economic growth and resultant job creation, education, health and other social welfare services.
Much of the first day is devoted to Government’s fiscal position – and by fiscal I mean, financial issues such as Government revenue and expenditure. Cabinet will receive presentations on the latest financial position and the expectations for 2017/18, given the present framework. We are aware at the outset that money is tight and that every Cabinet Minister must accept the duty of pursuing the maximization of revenue and the minimization of expenditure, without our national development programme being deprived of priority spending needs. Let us also remember that our private sector conducts a substantial amount of trade with Government, and trade can become valueless if payment is seriously delayed.
We must therefore be particularly resourceful. In the first instance we must ensure that parastatals retain in cash only what is agreed with the Ministry of Finance as necessary for agreed future capital expenditure. Secondly we should review the issue of taxing what might be called “super profits” – these being profits over and above what is reasonable within the context of our economy. Any such measures should have a positive thrust to them, such as any levy on excess profits of financial institutions should be clearly demarcated for financing the growth of small, medium and micro-scale enterprises (SMMEs).
Government remains dependent on external revenue, namely payments from the Southern African Customs Union (SACU), and vulnerable to variations outside our control. At the same time, the proportion of domestic to total revenue is still far too low. Higher tax revenue is the solution but we must apply the latest strategies for accelerating the rate of tax compliance to boost domestic revenue. That should be the first point of reference before considering any increase in tax rates and their deterrent effect on new investment.
In this regard Government and the relevant authorities should replicate what takes place in first world economies to maximize tax compliance, such as the integration of data bases, ensuring that all commercial and other transactions and activities are automatically correlated with tax identifications numbers (TIN). These measures will help substantially in our quest to eliminate tax evasion.
Closely linked to raising domestic source revenue is faster economic growth from new and expanded investment within the country. How is our business environment being transformed into the investment destination of choice? Let us remember that it is the big issues like infrastructure, labour stability, corporate tax rates, and other financial incentives that lure the big investor. How are we doing in those areas?
For what reasons will our small, medium and micro-scale enterprises (SMMEs) grow at the desired pace in 2017? How can Government assist in their needs being met in the coming year. We should remember that it is not necessarily an issue of Government paying out more money. It can be Government motivating the emergence of economy players, thereby facilitating access to skills, finance and markets.
My recent visits to other countries have opened up some wonderful opportunities in terms of skills development, technical assistance and bilateral trade and investment. I have written to the relevant Ministers on the requirements from our side. Let the Retreat ensure there is clarity as we prepare to match international generosity with Swazi performance.
Our education sector demands a review of the manner in which we finance public schools and colleges, as well as issues such as religious education in schools and the banning of sub-standard schools and colleges. It is essential that we mobilise the necessary processes to recover outstanding scholarship loans from past students. The resources recovered into the revolving fund will then enable Government to increase the number of new scholarship awards. Furthermore, we should re-examine the 50% repayable basis in respect of future scholarship loans.
Our health sector is so fundamental to the well-being of the nation, and there are inevitably important issues to discuss or resolve this week. These will include a focus on the two new hospitals, the challenges within the Phalala Fund, and the anomalies relating to qualifications within our health services. There will also be discussion on the absorption into the Public Service of employees in subvented health institutions.
The proposed rationalized initiative – the establishment of the National Social Security Authority (NSSA) – which will bring together a number of public funds under one roof, and release funds for building up enhanced benefits to the general public - has to be in draft legislative format by the end of 2017. Let us discuss the strategy to make that a reality.
With the recent drought having been caused primarily by the El Niño weather pattern, we must be aware that it is often followed by La Niña which can give rise to exceptional storms and high rainfall. Just as we have spent a good deal of money and made substantial institutional changes to deal with drought let us ensure we apply that additional capacity to anticipate and deal with to other extremes such as excessively wet conditions.
Finally, we should note that this Retreat’s agenda includes a discussion of allowances for judges, as well as examining the need for additional judges which will undoubtedly accelerate the pace at which outstanding corruption cases are resolved.
Honourable Colleagues, we have a busy programme and must start promptly. I hereby declare this Cabinet Retreat duly opened.
Thank you.