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Financial Experts Fear 2024 Budget ‘Gift-Giving’ Approach



Financial Experts Fear 2024 Budget 'Gift-Giving' Approach
Image source: Defi Media

As the electoral season approaches, the Minister of Finance, Renganaden Padayachy, will present the final budget of this term in the coming weeks.

In this context, Le Défi-Plus took a closer look at the key measures of his previous budgets and the main axes of the 2024-25 Finance Bill.

In a recent statement, Minister Padayachy announced that the budget will prioritize social, economic, and environmental issues. However, concerns are being raised about the possibility of making populist promises to win over voters in the upcoming election.

Minister’s Priorities

According to Minister Padayachy, the budget will focus on improving the country’s economic, social, and environmental resilience.

“Our philosophy has always been centered on human capital, how to improve people’s lives and the climate agenda.

That’s the direction we’re heading in. We want to provide more support to vulnerable individuals and the middle class to boost our economy.”

Anticipations: In an election year, experts expect the Minister of Finance to make populist promises to impress voters.

“In an election year, especially when it’s the last budget of the minister, you can expect some popular measures to win over voters,” said Clensy Appavoo, CEO & Senior Partner at HLB Mauritius.

“I think he will be generous without really worrying about how these measures will be funded, as that will be the next government’s problem.”

Anthony Leung Shing, Country Senior Partner at PwC Mauritius, shares similar concerns.

“I don’t expect any surprises in an election year. The announcements made during May Day meetings already show the direction of budgetary measures, and the danger is that it will create inflation.”

Gérald Lincoln, Country Managing Partner at EY, also anticipates a generous budget.

“This is an election year, and history has shown that governments tend to make gifts to create a ‘feel-good factor’ and influence votes.

We can expect popular measures that will please the masses, such as increased subsidies for rice, flour, and cooking gas or reduced prices for petroleum products.”

Priorities for the New Budget

Experts agreed that the new budget should prioritize economic development and execution. “Economic development is essential for social progress, but what’s really important is executing announced measures,” said Anthony Leung Shing.

“The budget should not just be announcements without actions!”

Gérald Lincoln added that two key areas should be prioritized: maintaining consistency and continuity with existing policies and focusing on Mauritius’ economy.

Economic Operators Need Support, Not Handouts

As the Minister of Finance is preparing to present the next budget, economic operators are urging for support and facilitations, rather than handouts.

“We need to encourage entrepreneurs with incentives and investments, rather than just giving them gifts,” said Clensy Appavoo, CEO & Senior Partner at HLB Mauritius.

Priorities for the Next Budget

According to Clensy Appavoo, the Minister of Finance has already given an indication of his priorities, focusing on social, economic, and environmental issues.

“I think the Minister will provide more support to the vulnerable members of our society, pensioners, and review certain economic structures that have growth potential, such as sustainable agriculture, renewable energy production, and industrial fishing development.”

What to Avoid

Gérald Lincoln, Country Managing Partner at EY, warned against digging into the budget deficit and being irresponsible.

“We need to avoid overspending and not burden future generations with our debt. The temptation to give out too many gifts could be dangerous.”

The Social-Economy-Environment Triptych

Anthony Leung Shing, Country Senior Partner at PwC Mauritius, believes that technology and innovation should be key drivers of social and economic development.

“It’s not surprising that this is the focus of the budget, as it represents a continuity of previous budgets.”

Consolidation and Vision for the Future

Clensy Appavoo emphasized the need to consolidate different economic sectors in the country and develop a vision for the next 10 years.

“It’s urgent to put in place measures to address climate change and its effects on our beaches and cities. We can’t just say that climate change is a global issue; we need to take concrete measures.”

Capital Human and Retention of Talent

Gérald Lincoln welcomed the announcement that human capital will be a priority. “There has been a significant brain drain in recent years, so if the Minister can encourage talent retention in Mauritius rather than exodus, it would be a great thing.”

Environmental Priorities

Anthony Leung Shing noted that environmental issues are a global priority. “It would be interesting to see what measures the Minister will announce in this area.”

Resilience Economic

Clensy Appavoo emphasized the need for an economy that is resilient to external shocks.

“These three axes – social, economic, and environmental – are all important and necessary… We are waiting to see what measures will be announced. Will the Minister be able to innovate and bring creative measures to move the country forward?”

Source: Defi Media

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