27 February 2013
The SACP notes the context of the continued crisis of global capitalism whose effects will be felt, according to Minister Gordhan, for at least 3 to 5 more years. This is the fundamental context in which the Minister announced a tighter budget. Notwithstanding these realities, we welcome the fact that, despite reduced revenue, many of the major pillars of expenditure including infrastructure, education and health-care are maintained. Although the Minister did not explicitly say so, the budget`s stance has rejected a path of austerity disastrously followed by many countries in Europe. However, the SACP is concerned that there was an overemphasis in the Minister`s remarks that maintaining such a stance is dependent upon achieving growth rates of 5%. We believe that maintaining a contra-cyclical stance is precisely the means for achieving sustained, inclusive growth.
The SACP takes note of the proposals announced by the Minister on youth employment tax incentives. We appreciate the assurances that these will be located within the package of measures being developed in the proposed Youth Employment Accord, and the assurances that the concerns of organised labour about displacement of existing workers will be respected. However, the SACP believes that it will be necessary for social partners to engage with the details to ensure that these assurances materialise in practice.
The SACP notes that while exports increased by only 1%, imports rose by 7%. This underscores the extent to which we remain on a consumption rather than a productive sector driven growth path. Apart from promoting exports and requiring finance by short-term capital inflows, our trade imbalance critically requires active interventions to limit imports – particularly of illegal imports and dumped goods from other economies – in the interests of promoting jobs in SA and the development of value-added productive sectors locally. In this context we welcome continued support for industrial projects, and the indications provided by the Minister that a number of major investments in value added projects in the real economy remain on track.
The SACP welcomes the announced expenditure review to control waste and the related steps to setting up a Chief Procurement Office to eradicate corruption. However populating this initiative with only private sector people gives a false impression that there is no corruption in the the private sector. In fact the recently exposed corrupt collusion by large private construction companies shows that we must look for principled people everywhere, in the public, private and NGO sectors. In a similar vein we warmly welcome the move to deal decisively with large multinationals that do not pay taxes in the countries in which they operate and in which they make their money. Likewise, we commend the initiatives of SARS to closely audit companies that are beneficiaries of government tenders and contracts to assess whether they are paying their share of tax in return.
Other positive elements in the budget speech include:
Finally, in the context of the SACP`s commitment to re-invigorating the financial sector campaign, we welcome the announced measures to limit access to garnishee orders for those making unsecured loans. However, the SACP is of the view that there remains a need for a major and much more comprehensive strategy to address ballooning, unsecured credit, particularly where this involves preying on the vulnerabilities of working people and the poor.
Issued by the SACP
Contact:
Malesela Maleka
SACP Spokesperson – 082 226 1802