“Transformation” – or “radical economic transformation” – has become the buzzword of our contemporary political discourse. Few would deny that a more transformed South Africa is urgent. And few would deny that the ANC could have done more to advance economic transformation since 1994.
But the politics surrounding transformation obfuscate the urgency of South Africa’s socioeconomic malaise. It is still mostly black South Africans who teeter on the brink of abject poverty.
On Wednesday, Finance Minister Pravin Gordhan presented what is being described as a “pro-poor budget”. The focus, under the theme of transformation, was “realising social rights” and introducing a new 45% tax bracket for those who earn more than R1.5‑million a year.
We must question why it’s taken so long to have this type of wealth tax. Surely it should be common sense for a developing economy crippled by slow growth to impose additional taxes on high-income earners? Yet on social media – and beyond those bubbles – commentators are questioning why corporate income taxes were not raised. Given that ownership of big business is still skewed in favour of white people, surely a hike in corporate taxes makes sense?
As attractive a solution as that may be, it isn’t that simple.
For one, a hike in corporate income taxes may affect profitability and thereby affect the rate of employment. We must also consider that big business is also owned by middle-income earners through their stock in pension funds.
As a resource-rich economy, it is also time to reconsider an expanded tax apparatus to ensure the wealth beneath our soil is mined to the benefit of the people living above it. And when we consider the disastrous consequences of mining for the people who must live in its immediate shadow, then the responsibility for ensuring an equitable distribution of its gains must be felt by the mines.
Post-budget 2017, however, life goes on unchanged for the corporates.
For now, as Gordhan rightly pointed out, what we need is “a consensus on a transformation programme – with each of us clear about the contribution and sacrifices we have to make to ensure optimal inclusivity”.
Yet Gordan appears to be a marked man. Any misstep – or even the appearance of a misstep – could see the minister registering for unemployment insurance. It is unfortunate that power is being contested through a discourse about poor people. What exactly is the transformed society we aspire to? And who exactly must work to make it happen?
Perhaps, as we pause to listen to the president and his finance minister, it’s time that we pause to listen to the people the discourse of economic transformation purports to represent.