The Democratic Progressive Party (DPP) says the Tonse Alliance’s promise to create one million jobs in one year is cheap talk since the 202/21 national budget does not include ways of stimulating job creation.
DPP spokesperson on Finance Joseph Mwanamvekha made the remarks today in his response to the budget.
According to Mwanamvekha, the DPP Government believed strong growths backed by a sound and favorable macroeconomic environment; huge infrastructure projects; and a wide range of proven private sector incentives for both local and foreign investors would influence job creation.
He noted that none of these are there in the budget. He further noted that there is a fiscalised growth of 3.2 percent and domestically financed projects estimated at a mere K100 billion.
He added that the Malawi currently has a struggling private sector battered by Covid-19 but it has been denied of fiscal incentives.
Mwanamvekha further said that the Malawi economy is facing issues such as collapse of the Tourism sector; severe contraction in both foreign direct investment and diaspora remittance; gloomy macroeconomic outlook; widespread lockdowns and shattered business confidence.
“One can only categorically conclude that the One million jobs agenda for the Tonse Alliance Government in one year is simply a wish, cheap talk and broken promise for the Voters from the outset,” said Mwanamvekha.
According to Mwanamvekha, government should have provided Tax Holidays to the private sector and should have reduced Corporate Tax from 30 percent to 20 percent in order to support the struggling companies hard hit by COVID-19.
“We, from this side are of the view that reducing VAT from 16.5 percent to around 13.5 percent, clearance of private sector arrears hovering at around K360 billion; and provision of fiscal stimulus package to businesses hardest hit by COVID-19 especially in the Tourism sectors would have helped the sector to recover and stimulate economic growth,” said Mwanamvekha.
He then commended the government for raising the tax free band from K45,000 to K100,000, saying it will increase the disposable income to the few that are in the formal employment.
He, however, expressed concern that that there are millions of young, energetic, highly skilled and qualified Malawians who may not benefit from this policy as they are not employed.
“Thus why, Madam Speaker, the DPP is very worried to note that the 2020/2021 budget is illusive on the promised One million jobs within one year of the Tonse Alliance Government,” said Mwanamvekha.