It would be petty to focus only on the shortcomings of Budget 2003. The key thing is that it is expansionary, continuing and accelerating a trend visible since 2001. The government’s approach in the 1996 to 1999 period, when the Budget shrank 1% in real terms, was simply indefensible in a transitional economy like ours, with such glaring socio-economic backlogs.
One can certainly argue that the targeted 7,7% inflation rate for the year ahead is unrealistic, and that the Budget is less generous than it appears. One can also protest that there is scope for less stringency on the budget deficit. The Congress of South African Trade Unions has pointed out that European economies struggle to hold their deficits at below 3%, while ours will grow to 2,4% over the next two years. Intense pressures within the tripartite alliance between the ruling African National Congress and its union and communist partners partly account for the shift, as does the fact that South Africa is moving into an election year. But it is not unfair to follow our cartoonist, Zapiro, in acknowledging that Minister of Finance Trevor Manuel has thrown off Margaret Thatcher’s twinset and pearls.
The battle-lines shift, therefore, to the question of how government money should be spent — and the Budget deserves much praise for what it tries to do for South Africa’s impoverished underclass. Some R4-billion has been allocated to local authorities for the provision of free services. Tax breaks amounting to R13-billion will boost the disposable income of low- and middle-level earners.
An estimated nine million poor children stand to benefit from the extension of the qualifying age for child grants over three years. Funding for the school nutrition programme will rise by nearly 40%. A total of R1,2-billion is set aside for food relief. Increases in state pensions and disability grants will at least maintain their purchasing power.
How much of Manuel’s largesse reaches the poor depends, in quite large measure, on our creaking and not wholly honest public service. Of the estimated 3,9-million children currently eligible for child grants, only 2,5-million actually receive them.
Among the Budget’s more worrisome features is its treatment of black economic empowerment and land reform. The allocation of R10-billion for new empowerment ventures may be a first, but leaves virtually untouched the mind-boggling conundrum of how the necessary capital is to be raised.
Asset transfer targets in the mining industry alone require R100-billion over the next five years. The R1,9-billion earmarked for land restitution over the next two years is a fraction of what is needed to meet the government’s own 2005 deadline, and appears to be at the expense of other, equally vital, reform initiatives.
But the major concern with Budget 2003 is, as always, jobs. Manuel nibbles at this with funding for labour-intensive local government projects, incentives for inner-city refurbishment, learnerships and tax breaks for small business. But it is hard to disagree with a senior unionist’s complaint that the government has yet to grasp job creation as overridingly our most urgent national priority, requiring single-minded focus.
The Budget does little to confront the years-long shrinkage of the formal sector. In the context of 40% unemployment, Manuel’s observation that last year’s job figures were positive for the first time in six years comes over as whistling in the dark.
Neither the free-market nostrums of the Democratic Alliance nor the government’s mildly interventionist measures offers solutions to this intractable crisis. The forthcoming growth and development summit provides an opportunity for fresh and innovative thinking that should be seized by the state and the private sector.
Victory for the little guys
Despite Australia’s relentless march towards the final, it is the smaller countries that have livened up the cricket World Cup. The International Cricket Council and the South African organising committee were castigated when it was announced that 14 teams would contest this year’s event. With just nine genuine Test-playing nations, critics claimed that the minnows would be out of their depth and too many of the first-round matches would be hopelessly one-sided affairs.
But the past three weeks have proved that the move to broaden the sport’s appeal has paid off. It is the non-Test-playing nations that have provided a glimpse of sport as it should be played — for the love of it, not for the money. Holland and Namibia have seldom threatened a victory but have played with spirit and enthusiasm.
The Canadian part-timers established the record low score of World Cup history (36), then bounced back to set another cup record when Jon Davison blasted a century off just 64 balls in their next match. And they had South Africa reeling at 23/3 in East London on Thursday.
The surprise heroes of the tournament so far, however, have been the Kenyans. By beating Sri Lanka and getting four free points for New Zealand’s refusal to play in Nairobi, Kenya are in a good position to make the next stage. If they beat Bangladesh on Saturday (very likely) and repeat their 1996 victory over the West Indies, they could even top pool B.
In fact, it is the Bangladeshis — given Test status, it appears, by virtue of the size of their TV audience rather than their depth of talent — who have been the only World Cup whipping boys.