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The Minister of Finance has once more presented a budget statement in the interest of foreign investment and the protection of private monopoly capital gains. The budget has not departed from the neoliberal cognitive dissonance of inflation targeting and the obsession with foreign direct investment which have never worked to resolve the fundamental problems facing the country’s economy: poverty, inequality and unemployment.

President Jacob Zuma took platform and declared 2015 as the year of the Freedom Charter and unity in action to advance economic freedom. Yet the whole budget statement said nothing about the Freedom Charter, its realization or economic freedom. Indeed, sixty years after its adoption in the people’s congress in 1955, its fundamental demands have not been met: the mineral wealth is not in the hands of the people; strategic industries like banks and mines are not in the hands of the people; land and agriculture is still not in the hands of the people and the doors of learning in higher education remains the preserve of those who can afford.

The minister further increased personal income tax by 1% to mobilize part of the R15 billion needed for state revenue. This is all the while corporate tax, particularly on big industries like the banks, mines, manufacturing and retail oligarchies remains untouched. The minister further increased social grants but then also increased the price of electricity, basically holding ordinary people accountable for the electricity crisis instead of big capital.

The EFF is above all disappointed with the minister’s inability to properly acknowledge and deal with the long overdue crisis of illicit financial flows. The crimes of transfer pricing and profit shifting remain at the core of what drains the fiscal resources of the country. Since the establishment of the democratic parliament, only the EFF has sharply raised the matter of illicit financial flows and tax avoidance by big multinationals. The 2015 budget statement simply mentions that tighter controls will be made, which is as good as saying nothing since all these have not helped resolve the problem. A legislation needs to be introduced to criminalize transfer pricing and profit shifting with consequences that include imprisonment and compensation.

Whilst the EFF welcomes injections into healthcare and education, it is still concerning that there are no tax reliefs on text books particularly for university students. Many students need to fundraise for tuition, accommodation and then still do so for the expensive text books that are critical for their learning. In addition, we welcome the commitment to curb on state expenditure and hope that part of reconsideration in cutting expenditure will be the reduction of the unnecessarily big cabinet and of SONA parties and fashion parades. Also, Nene must report how much has been saved in the precious attempts since this is really not a new proposal either.

The EFF will make its extensive proposals on how to properly deal with the problems illicit financial flows so as to expand the fiscus and avoids punishing ordinary citizens through increasing electricity and personal income tax. We shall do this during the very debate of the budget statement in parliament.

Issued by EFF