/ 22 October 2013

Fedusa’s mid-term budget wish list

Finance minister Pravin Gordhan operates on a two week cycle as he prepares to be ousted at any stage.
Finance minister Pravin Gordhan operates on a two week cycle as he prepares to be ousted at any stage.

The medium-term budget policy statement (MTBPS) needs to focus on education, limited tax base erosion and taxing the super rich, the Federation of Unions of SA (Fedusa) said on Tuesday.

"We welcome the announcement that South Africa's tax revenue had recovered following the 2008 global financial crisis, growing at 6.8% between 2008-2009 and 2012-2013," said Fedusa general secretary Dennis George.

"This is indeed positive news … however, company income tax collections had not yet recovered to pre-crisis levels, as this is mainly due to the reduction in the contribution by the mining sector."

The South African Revenue Service (Sars) collected R813.8-billion in revenue last year, according to the 2013 Tax Statistics publication that Sars and the national treasury tabled on Monday. This was R71.2-billion more than during the 2011-2012 fiscal year.

Finance Minister Pravin Gordhan is scheduled to deliver his MTBPS in Parliament on Wednesday afternoon.

The importance of planning ahead
George said it is important for Gordhan to link future planning to the National Development Plan (NDP) and provide support for growing the economy to focus on job creation.

"It is essential for the minister of finance … to prioritise spending and to direct resources to improving education, training and innovation, which is one of the key pillars of the NDP," he said.

"The salaries of these public servants have lagged the salaries of their private-sector counterparts. We need to reverse the brain drain from the education sector."

Fedusa said it was time to establish a tax for people who earned more than R1.5-million a year.

"This additional tax revenue will generate additional resources to narrow the deficit and to reduce inequality and poverty," said George.

"This proposal was prompted due to the very high executive package and bonuses that are paid to those at the top, also known as the super rich." – Sapa