The problem is that when general policy failure happens, it is unjustifiable to conclude that the general policy failures are caused by affirmative action, writes Ralph Mathekga.
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President Cyril Ramaphosa after delivering his maiden State of the Nation Address (Photo: Jeffrey Abrahams, Gallo Images)
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Cyril Ramaphosa honeymoon was abruptly cut short when Finance Minister Malusi Gigaba presented a
budget for 2018 that is intended to harm poor people, as well as the middle and
year's budget speech cut short Ramaphosa's rhetoric of "a new dawn",
as our pockets will definitely feel the pinch when the new tax measures kick in
come April 2018.
is no doubt that many in society will write, advocate and demonstrate against
the proposal for increases in VAT from 14% to 15%. There remains a zero-rating
of basic food items such as maize meal, brown bread, dried beans and rice, as
outlined in the budget speech. Even that knowledge is not enough relief given
that the increase in fuel levy by 52c and the increase in VAT will definitely
drive up production and transportation costs of goods and services.
2015 we have been experiencing increasing poverty levels as a country. These
tax increases are nowhere near assisting with poverty alleviation. This is a
truly anti-poor budget that will cause more harm and discontent in society.
are saying that government cannot afford to upset the private sector and
increase the corporate income tax rate even if from 28% to 29%. Others are even
overlooking the fact that there are countries (like Brazil, India, Germany,
Japan and others) with higher corporate taxes than ours.
used to be at 37.8% in 2001 and gradual decreases were effected until an abrupt
6.55% decrease was effected in 2013 from 34.55%.
logic that business has a superior voice will hold until a taxpayers' movement
begins in this country, making a number of demands. One crucial demand is for
government to cut down on its own excesses ranging from high salaries for
politicians to benefits derived from the state by high income earning public
servants to unnecessary tendering for certain procurement such as stationery.
capping measures are definitely needed in our procurement processes. We cannot
have a government that behaves as though it does not know the prices of goods
and services and allows bizarre mark ups from service providers.
euphoria that swept through our country since the election and swearing in of Ramaphosa
as president of South Africa nearly made us forget that the government remains
the same – ANC led.
government has demonstrated over the past almost 23 years that it is incapable
of charting a social justice engineering programme. It has also demonstrated
that it succumbs easily to the demands of business and punishes the very poor
people it claims to be championing their cause for a better life.
is a government that has presided over great ineptitude and
institutionalisation of corruption from the local up to the national spheres of
government. These are the practices that have over the last 10 years led us to
a path where we now are to pay R180.1 billion servicing our debt. A burden that
must now rest on the shoulders of ordinary citizens of this country.
wields no magic wand – even if he postures in that fashion. Words have little
meaning when not followed by action. It is true that Zuma had created great
cynicism over government but his enablers are comfortably behaving like
messiahs that have rescued the nation from the grip of looters receiving
political protection from Mahlamba Ndlopfu.
these trying times of increasing poverty, unemployment and inequality,
corporate tax should have been increased to cushion the poor. It is true that
business could have retaliated by placing a mark-up on the cost of goods and
services – such is the unpatriotic nature of business and its inability to be
part of driving social justice.
has in recent years slowly reverted to the archaic belief advanced by Milton
Friedman that "the business of business is business". It is archaic
because there has been a strong case made for a much more redistributive tax
regime – cushioning the poor and taxing the rich (high income earners and
made a commitment that "vulnerable households will also be compensated
through an above average increase in social grants". This will drive child
support grants from R380 to R410 a month by October 2018. Guess what, without
VAT child support grants increased by R20 in 2017. So there is only R10 being
given to over 10 million recipients of child support grant to cushion them from
a life changing VAT increase?
the increase on the old age and disability grants only differs by R10 from the
2017 increases. Therefore this budget has done nothing to protect the
vulnerable from the fuel levy and VAT increases.
on another important matter that could still drive up the cost of living,
Eskom, both Ramaphosa and Gigaba were mum. Gloating about a change of the board
and a firing of management is not enough. Their speeches said nothing to allay
the fears of employees whose pension funds were used to provide a R5 billion
bridging facility to Eskom. No indications as to where the other R15 billion
desperately needed by Eskom will come from.
Eskom will apply for exorbitant energy tariffs due to high debt exposure and
need to clean up its balance sheet. The worst is yet to hit us as a country and
this "new dawn" brigade does not seem to have compelling ideas on how
to return us from the brink of economic collapse.
Cyril Ramaphosa declared 2018 the year of summits, commissions and
consultations. There are no concrete plans in place to arrest this economic
collapse in the short-term. These consultative forums make one conclude that
Ramaphosa is on electioneering mode – wanting to sustain a charm offensive and
a PR campaign of endearments to society. This will not be enough. Focusing on
the low hanging fruits of talking tough on corruption, state capture and be seen
as removing deadwood in Cabinet will only take him so far – which is not that
is a compelling vision and a master strategy of execution that South Africa
needs. We need to rethink so many things, including how we are currently
extending social security. Following the SONA and budget speech of the "new
dawn" we are none the wiser on new mechanisms to generate money to fund
free higher education, even though this was promised to the public.
at times it is true that "the more things change the more they stay the
- Lukhona Mnguni is an independent political analyst.
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