Budget recognises the poor
IN 1994, the key element of the first Budget speech of the democratic era, delivered by Derek Keys, the finance minister in the Mandela cabinet, centred on reconstruction and development.
Twenty-three years later, a strong emphasis on reconstruction – but of a different kind – was again apparent in the Budget speech delivered yesterday by Finance Minister Pravin Gordhan.
Yet again, the minister proved astute at walking a fiscal tightrope.
In drawing up and managing the Budget for the next year, he dealt impressively with a number of vexing issues. Chief among these was the direction he decided to take to tackle poverty. He had to… He would have been only too aware about how an increasingly vocal electorate has been making its dissatisfaction known in a number of ways, but most notably at the ballot box. Last year, the seemingly invincible governing party was voted out of power in three metros – Nelson Mandela Bay, Johannesburg and Tshwane – in local government elections.
It was not surprising that in addition to his usual sources, Gordhan turned to the rich to find the additional R28 billion needed by the fiscus this year. Like the vast majority of South Africans, we welcome the move to tax those earning more than R1.5 million a year at 45 percent, an increase of 4 percent.
The minister deserves high praise for finding the cash to provide some relief to the country’s struggling middle class and, especially, the poorest of the poor.
We welcome the fact that over the next three years, social grants will be increased from R457bn to R490bn and that R114bn, an increase of almost R6bn, will go towards subsidised public housing. In the same vein, R189bn will go to local government to provide basic services to poor households, while R142bn will provide support for affordable public transport.
We’re pleased, too, that the plight of poor students has been acknowledged, with transfers to universities rising from just over R93bn to R106bn and the National Student Financial Aid Scheme rising more than R13bn to R54.3bn.
The poor is still owed a debt of gratitude for their years of patience, but Gordhan has signalled that he acknowledges their plight – and this is to be welcomed.