The Minister of Finance, Malusi Gigaba’s, 2018 Budget hammers the poor and is a legacy of Jacob Zuma's disastrous management of the economy of South Africa.
The increase in taxes revealed today is symptomatic of an ANC government which has failed to plan ahead and make the necessary cost-cutting measures to shield ordinary citizens from poverty.
The announcements made today are nothing less than a massive body blow to poor South Africans. They will dampen economic growth and fail to create much-needed jobs.
The VAT increase of 1 percentage point is a smack in the face for the millions of South Africans who face a daily battle to put food on the table. This increase, combined with the new fuel levy increase, will force poor South Africans to pay more for basic goods, services and transport.
Instead of taking decisive action to cut wasteful expenditure and trim the fat, the Minister has introduced proposals for cost-cutting that will only reduce service delivery. Specifically:
- Provincial Equitable Share, the proportion of the budget allocated to provinces, will be reduced by R 4.7 billion;
- Provincial conditional grants, mainly Human Settlements and Education infrastructure, will be reduced by R 13.7 billion;
- Local Government grants will be reduced by R 16.1 billion
1. conditional grants, which includes money for building schools, will be cut by R 13.9 billion;
2. indirect grants by R 2.2 billion; and
- The police services will be reduced by 2 000 personnel.
The choice to cut funding for building schools and employing police officers will only put the futures and safety of our people at risk and is a terrible tradeoff.
The allocation of R57 billion over the medium term to fund poor students in higher education may seem like a step in the right direction. However, it is not sustainable and fails to address the true nature of the problem and the decades of chronic underfunding of this sector.
Instead of stabilising the national debt levels, they will continue to rise to R 3.3 trillion over the next three years and debt service costs will amount to R 592 billion over the medium term.
The once-off provisional allocation of R6 billion to drought relief is symptomatic of the short-term planning by National Government which lead to the current water crisis in the first place.
Yesterday the DA set out how Minister Gigaba, through robust expenditure cuts, a comprehensive expenditure review and the sale of assets such as parts of Eskom, could save R112 billion and avoid tax increases.
All in all, the Minister has failed to cut the fat and has opted instead to protect the few and reach into the pockets of poor South Africans to cover the cost.
Issued by DA