(ZIMPAPERS) Restitution of "burnt" money would cost treasury US$54 billion

Restitution of "burnt" money would cost treasury US$54 billion
Friday, 07 October 2011 20:22

GOVERNMENT will impose a benchmark when compensating people whose savings were eroded after dollarisation as it emerged wholesome restitution including those who “burnt” money would cost Treasury US$54 billion.

Finance Minister Tendai Biti said the cutoff plan was meant to make sure people like pensioners and genuine depositors affected by the dollarisation of the economy were compensated. He said at the official exchange rate, US$54 billion required to collapse all the Zimbabwean dollar accounts would “choke” the country.

Minister Biti was speaking in the House of Assembly on Wednesday while responding to a question from Uzumba legislator Cde Simbaneuta Mudarikwa (Zanu-PF) who wanted to know if the 2012 national budget would have provisions for Zimbabwean dollar account holders. Cde Mudarikwa wanted to know the rate that Minister Biti was proposing to cater for especially pensioners whose pensions were affected by the change from Zimbabwean dollars to foreign currency.

“The majority of Cabinet members seem to favour that we come up with a cutoff point,” Minister Biti said.

“If you had a quintillion dollars and above, we make the assumption that you were ‘burning’, so we cutoff there.

“We protect the poor people and so forth. We might come up with that because a lot of our people who have quintillions and so forth do not have audit files.

“If you review their tax files, they have not paid their tax. We might do so, but it is just the rate and amount that are creating a situation that we are not happy with. It will be meaningful if one gets something like US$200.”

Minister Biti said in the 2011 National Budget, about US$7 million had been set aside for compensating Zimbabwe dollar account holders at the United Nations prevailing rate of US$1 to 35 quadrillion as at December 31, 2008. But if the money was converted by banks, Minister Biti said, some people would have received as little as US10 cents while big accounts were the only ones that would have received decent money.

He said the other option was to find about US$20 million, which he said was a difficult task. Minister Biti said this approach would only see people who were “burning” money benefiting at the expense of genuine and innocent account holders. Before his Mid-Term Fiscal Policy Review this year, Minister Biti said Government had rescinded its decision to disburse US$7 million it had budgeted in the 2011 national budget for compensating Zimbabwean dollar account holders after banks presented a bloated payout bill.

He said the banks wanted to milk Government amid allegations that some bank workers had rushed to credit their Zimbabwean dollar accounts with more money. Minister Biti said instead of US$6 million, banks had presented a payout bill of more than US$18 million. - CHRONICLE