SIMPLE SOLUTION TO FUEL CRISIS

The SPPF government has taken the seemingly easy option and resorted to raising tax on fuel consumption to the tune of 412%. This is, ostensibly, to meet the rising  annual cost of the nation’s fuel bill which is now estimated to reach US$60,000,000 for the whole year.

More taxes are being seen as the solution to all the government’s financial woes, whether created by false economics or caused by external factors beyond our control . Whenever the government over spends the published budget or discovers a shortfall in revenue on its overstated estimates, it has increased taxes on the people to make up for it. This time, it has become apparent that the geniuses at Central Bank, Liberty House and State House have run out of imagination or creativity. They may just have checkmated themselves.

Whenever President James Michel has sought their advice and counsel on financial matters, their answers has been plain and simple: increase taxes. This time they have not disappointed their President. However, is their advice wise?

Perhaps there is a much simpler and better solution to the perennial crisis of a shortage of money  to pay for the overspending of the budget. Had the geniuses at Liberty House and the Central Bank scratched their collective heads slightly more vigorously, which would have had the collective effect of triggering their collective grey matter. They would have advised James Michel otherwise on the fuel tax issue. Rather than new junk bonds and an increase taxes on fuel consumption, they should have advised President James Alix Michel to adopt these practical solutions instead.

CLOSE DOWN THE ARMY

The army, like IDC, is a very expensive institution. While it consumes resources, it does not make any economic contribution to the country. Neither, because of its size, does it have any purpose in the defence of the country.

Ever since it was created in 1977, the Ministry of Defence has enjoyed the highest budget allocation after Education and Health. Although in 2006 the amount budgeted was SR77, 297,000 the actual expenditure was SR87, 851,000. In 2005, its budget was SR69, 000,000 but the actual expenditure was SR81, 000,000. Interestingly, the sum spent on salaries and wages increased by just SR3, 000,000. Despite this large discrepancy, the Ministry of Defence is not subject to any criticism by the Auditor General nor by the Finance Committee of the National Assembly in their reports. 

By abolishing the army, as we understand President Michel has done with the National Guard – which would save the government about SR20, 000,000 a year, he would be committing an act of a responsible government, thereby becoming  a President who really has a compassionate heart for every Seychellois. Again, with this saving, there would be no need to increase taxes on fuel. The money saved would benefit the lower paid by not having a cost of living increase of 4% on their basic wage.

What is the logic of having an army since we do not intend to attack any other country nor are we going to be attacked by a hostile state and we have no border to protect against invasion. We are neither in a state of civil war or strife. Unless the President knows something which we do not, the raison d’etre of an army in Seychelles remains puzzling.

Admittedly, initially the army was set up to protect and defend the socialist revolution post 1977 and to keep the SPPF leaders in power. This raison d’etre no longer applies since the leaders of the SPPF have now agreed to abide by a constitution where they can keep power with the consent of the people in free elections. President Michel may be embarrassed to admit that in its 30 years of chequered history the army has never killed a foreign enemy, although it has succeeded in killing a number of Seychelles citizens in Seychelles

Does the SPPF intend to use the army’s brute military force against Seychellois some day? Is the SPPF government anticipating trouble in paradise? Closing down the army and using the money to benefit all the Seychellois without exception will earn President Michel much needed political points and perhaps an additional percentage or two above the mediocre 53% he got at the polls in 2006. Close down the army, we say. TENIR PA PLENYEN!   

CLOSE DOWN IDC

This newspaper has been urging President Michel from the day of his inauguration in 2004 to close down IDC altogether as a way of saving millions of rupees. Bear in mind each rupee collected by the government in taxes come from the sweat of the average Seychellois.

According to the Census in 2002, the population of  the eleven islands under the management of IDC was 536. Of those, 252 worked on Coetivy alone where SMB has the prawn farm while 136 were on Silhouette. Surely IDC was not subsidising SMB? In 2002 silhouette had a functioning hotel. Yet in 2002, IDC received government subsidy totalling SR18, 550,000 over and above the SR 15,834,000 revenue it said it generated from all its activities. From 01 April 2001 to 31 March 2006, government has provided grants and subventions to IDC totalling SR 82,998,000. Half of it went to subsidise the aeroplane, which Glenny Savy uses virtually as his private aircraft. In addition, IDC claimed that during that time it also generated SR83, 120,000. To manage this huge subsidy, Mr Glenny Savy pays himself a puny  salary of SR 17,725 a month.

In the 2007 budget, President Michel has again budgeted for a huge  subsidy for IDC. This includes SR 8,000,000 in subventions as well as SR 5,000,000 in so-called capital grant, making a total of SR 15,000,000. Except for keeping Glenny Savy in a cushy job, with one of the largest expense account anyone could wish for, IDC as an institution is obsolete and archaic. It has failed miserably to fulfil its declared objectives when it was set up while Glenny was still a very young man at school in Australia. Above all, it is a burden on every Seychellois.

We suggest, therefore, that IDC be liquidated, the islands leased to investors and entrepreneurs to produce food, vegetables, rear cattle and livestock and build 5 star hotels for tourists. Instead of wasting money on IDC, President Michel would in fact be collecting money from our islands, to be used for the benefit of every Seychellois, especially those condemned to a low income as a result of  15 years of economic failure under the one-party state.

The money saved can also pay also be used to support, the nation’s fuel bill, if indeed it needs supporting in this way, rather than punishing the lower income Seychellois with more burdensome taxes. An increase of one rupee in taxes for a person earning a basic wage of 2500 rupees amount to a four percent increase in his or her cost of living. For a senior civil servant earning 8000 rupees a month it is barely one-tenth of a percent increase. For someone earning SR 17,725 it is an increased burden of 0.005%

If Glenny Savy had a patriotic bone in his body he would himself advise President Michel to take this option rather than tax Seychellois families again.  The Seychellois workers pay enough taxes already like GST, (15%), Trades Tax, Social Security, Pension Scheme, Fuel Tax, Road Tax, Provisional Tax, Income Tax etc.

Their collective salaries have not increased in the last 15 years under SPPF rule. On the other hand, the cost of living (inflation) has sharply increased, even before the devaluation which has exacerbated further an already dire situation.

September 21, 2007
Copyright 2007: Seychelles Weekly, Victoria, Mahe, Seychelles