The Sunday Mail
THIS last month of the year, as is now usual, many Zimbabweans like to celebrate, let down their guard and have a good family time, a whole cultural effect fuelled in part by a combination of traditional, religious and global factors.
And often they have the money.
The “bonus culture” is now almost entrenched in the civil service and much of the salaried private sector.
An extra full month’s pay flows into bank accounts and is tax free. That tax-free extra has been reinforced this year.
This flood of extra money, and the spending, also boosts the incomes of shopkeepers, business owners and those who are self-employed — motor mechanics, painters, those into catering and entertainment, and even those who raise chickens, whose consumption rises significantly. They, in turn, spend more, so adding to the general extra money circulating and the good times.
In fact, all this extra spending is the source of the money for the bonuses. Those extra customs duties, extra VAT collected, the tax from more petrol sold and extra excise duty on alcoholic beverages give the Treasury the cash to meet the bonus bill for the civil service.
Without this year-end culture, we could simply spread the bonus money, and the tax saving it now includes across the year, paying zero bonuses at year end, but raising the monthly pay by 8,3 percent and reducing tax rates a little, at least outside the top rate, to compensate for having no tax-free month’s pay.
It would work, but most people would feel deflated since they are probably not used to regular monthly saving to create a block of extra cash at a particular point and might well feel guilty in spending the monthly salary on the fun extras.
For in effect, bonus time, both the formal bonuses for those in salaried employment and the informal bonuses for those who do a lot more business at year end, is in a sense a savings scheme, where our annual pay is a bit less over 11 months than it could have been to make sure it is double in the 12th month.
And once we start thinking about this extra cash like that, as money we have earned over our year’s work rather than as money falling from heaven, we are in a far better position to spend it properly.
We might well look carefully at what is advertised and what is on offer, but the idea that we should spend without rest until it is gone seems somewhat daft.
Of course, many will reckon, correctly, that they can budget for a bit of fun, and be able to spend a bit extra on fancier food, drink, entertainment and travel. Basically to party a bit. And so long as they are budgeting and sticking to the budget that is fine. Life cannot be long faces day after day.
But the partying, the buying without really thinking, the squandering have to be contained. Most people have a lot of extra needs building up during the year and towards bonus time, and when those extra dollars flow in from employer and customers, they need to spend them carefully so they have a clear start for the next year.
Everyone talks about January school fees and uniforms, and that is a big item in most family budgets. There are other extra expenses, such as catching up on clothing as items wear out, or on car parts, or on using bonus money to upgrade property. The list is endless.
Bonus time is largely an urban event. For the rural world, the big time for cash inflows is after the harvest, when cash crops and surplus crops are sold and more and more farming families are now included in those groups waiting for the payments. They do not see this money as falling from heaven, they see it as annual profit.
And they are becoming increasingly careful about how they spend it. The old scenes of partying near the tobacco auction floors are long gone, and these days serious business houses go to some lengths to win the custom of serious sober farmers. Urban people need to think of their “harvest money” in December in the same way.
To give ever more people their due, this is happening. A lot more money is spent on the more serious stuff than the party stuff and for many, the first term’s fees are the easiest to meet because bonus money was kept back specifically to pay them.
But we still see partying, often in quite illegal ways and at illegal venues, building up in December and the rising year-end road death rate is not just more traffic, but also more traffic coming from parties and other traffic where drivers have had far too much to drink. So, we still have some way to go.
No one suggests we need to become fanatical puritans. But the sensible, when their bonus or their harvest money comes into the bank, will have budgets and plans and be thinking carefully about who gets the dollars they spend.
