Budget 2016

Comments by Mr. Andr Bonieux

Senior Partner
Finance Minister Hon Pravind Jugnauth gave a mixed bag of reforms today. He started off by saying that
we had to be bold. Indeed, he came with a number of promising measures but we feel that he could have
done more on the potential reforms.
On the positive side, he announced measures to reform business facilitation including an acceleration in
issuing Building and Land Use Permits, the removal of constraints around Property Development
Schemes, e-licensing facilities, new powers to the BOI to clear projects already in the pipeline,
authorisation for non-citizens to acquire apartments and business buildings. This is highly encouraging.
He also announced the merger or combination of a large number of public bodies - we all hope for greater
efficiency. Interestingly, he mentioned that the SIC would be disposing of its mature investments. Is this a
way of saying that Government would finally get out of casinos? Time will tell.
We appreciate the reforms for more digital applications within Government, including the recruitment of
a Dedicated Chief Information Officer for each ministry.
The Minister also announced the implementation of the new metro, the Metro Express. We are concerned
that this project will be financed and run by Government even though he said that the construction will
start with the Victoria terminal on a BOT basis. When we know of the management of the NTC, one can
only dread how much this project will cost to operate all funded by the taxpayer. A PPP would be far
more cost effective, and the attractiveness of such a project properly evaluated.
The Minister announced a monthly allocation of up to Rs9,520 for a family of five. This is the first foray in
such welfare payments by a government and the cost has been estimated at Rs500M over a 2 year period.
If limited to that, the country can probably afford the measure, but the difficulty now will be in managing
this scheme. Let us hope that processes are in place and that the money only goes to the truly needy.
In spite of a number of positives, this government appears to be digging its heels in old-fashioned
structures. The Metro Express mentioned above to start with, investments in water continue to be solely
funded by government and job creation continues to be government's responsibility - statistics show that
civil servants will increase to 62,365 next year, an increase of 19% over June 2016. This is simply amazing!

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Budget 2016
Comments by Mr. Andr Bonieux
Senior Partner
A reform that was expected, but unfortunately not discussed today, was around targeted social benefits
health, education, pensions, transport, food subsidies. These benefits initially targeted for the needy are
now for everyones benefit and probably costing a fortune to the national treasury.
Another lost opportunity seems to be in recurring expenditure figures with an increase of 13.8% over
2015/16 whilst revenues from taxes are expected to grow by 9.3%. So whilst tax buoyancy appears healthy,
Government is spending much more than before and this is a year where inflation is estimated at a mere
2%. The funding gap will be huge when the grant from India will have been used up. The increase in
Government expenditure and the resulting 3.3% budget deficit also remains a concern.
Our conclusion is that this is a no-tax budget and that the Minister has made a genuine attempt at
reforming the economy, but not to the extent we expected.

PricewaterhouseCoopers, 18 CyberCity, Ebne, Rduit 72201, Republic of Mauritius

T: +230 404 5000, F:+230 404 5088/89, www.pwc.com/mu
PricewaterhouseCoopers is a member firm of PricewaterhouseCoopers International Limited, each member firm of a seperate legal entity.