Business

Budget coalition: Poor more in need of tax breaks

Staff Reporter

The 2008 national budget took a "business as usual" approach in failing to carry through President Thabo Mbeki's commitment to change all South Africans' lives for the better, the People's Budget Coalition said on Thursday, adding that the government will not be doing anything fundamentally different from what it has done in the past.

The 2008 national budget took a “business as usual” approach in failing to carry through President Thabo Mbeki’s commitment to change all South Africans’ lives for the better, the People’s Budget Coalition said on Thursday.

The government will not be doing anything fundamentally different from what it has done in the past 13 years, said the Congress of South African Trade Unions (Cosatu), which is part of the coalition along with the South African Council of Churches (SACC) and the South African National NGO Coalition (Sangoco).

“I think it’s business as usual,” said Cosatu secretary general Zwelinzima Vavi. South Africa still faces major challenges. Unemployment is a “national disaster” that has long warranted extraordinary measures, he said.

What the government needs to do is to say goodbye to a surplus budget in favour of a development budget. However, it persists in taking a conservative economies approach as drawn mainly from the banks and others biased towards the means of production.

The country was told there had been an economic miracle and indeed there had—for the few, said Vavi. Their profits have risen, they are living in opulence, their taxes are down and they are now able to take money out of the country unencumbered.

The country’s people had been told that cutting taxes to the bone for corporate companies would lead to huge investment and jobs for everybody. Yet, growing inequalities in the country are ignored. Progress in creating jobs is slow and the quality of those jobs means fewer people have been lifted out of poverty than should have been the case, said Vavi.

The coalition will continue to put its alternative proposals to Finance Minister Trevor Manuel, he said, adding that it will meet with him at the National Economic Development and Labour Council on Friday.

The coalition’s budget proposals for 2007/08 were made under the headline “Spend more, spend better and on the right programmes”. Its proposals for next year’s budget are themed: “Budgeting for surplus in the midst of poverty, inequality and unemployment”.

“We hope that the government will take into account the cost of living as a result of escalating food prices, fuel and its impact on the poor,” the coalition said. “We expected the government to reduce the value-added tax to give the working class relief, especially from high food prices.

“We also expected the government to support industrial policy as a strategy to create more jobs and stimulate economic growth.

“On the other hand, we expected the government to accelerate land reform, improve shelter and poverty alleviation and [spend] more money on HIV/Aids,” it said.

Manuel’s budget was not clear on costs relating to the R60-billion Eskom loan—such as who would pay for it and whether consumers, and therefore the poor, would foot the bill, said Sangoco’s Jacob Molapisi.

The coalition is now interested in the implementation of the measures Manuel put forward, hoping this will show a “business unusual” approach.

In education, it needs “some indication” of the way in which the feeding scheme will work, how many classrooms will be built, the programme of teacher training, and details of the acquisition of maths and science teachers as well as better access to tertiary education by orphans and vulnerable children.

The coalition has similar concerns about land restitution and redistribution, and after-settlement care.

It is trying to be “a genuine participant” in the war against poverty in South Africa and to break the system that benefits an elite instead of the masses, said SACC executive director Desmond Lesejane.—Sapa

The M&G Online budget special report is brought to you by the

Topics In This Section

Comments

blog comments powered by Disqus