The poor need more champions
Cosatu and SACP strangely quiet about Gigaba budget
One has to ask what SA is coming to. Right now the DA appears to be the loudest opponent to what has been described as possibly the most regressive budget since 1994. The party is rallying its troops to fight the one percentage point increase in Vat announced by the minister of finance last week. It’s also opposing the hike in transport levies.
“We will not support a regressive and anti-poor policy by the ANC and will be launching a national petition to say ‘no’ to Vat and transport levies,” said DA leader Mmusi Maimane soon after Malusi Gigaba announced the first Vat increase in 25 years.
There’s also been a commendable pushback from civil society, but there hasn’t been the traditionally raucous response from the big guns — Cosatu and the SACP, which we could always rely on to churn out righteous indignation at the drop of a hat.
Within hours of the budget, parliamentary finance committee chairman Yunus Carrim was talking about a pushback; he said the increase wasn’t a done deal until it had been approved by parliament, hinting at the possibility that, for the first time since 1994, the budget might not be approved in its entirety. But that position seemed to be toned down in the following days.
Sadly, Maimane’s loud opposition to the move may have killed any hope of a reversal. The reality is that as much as the ANC’S rank-and-file MPS feel instinctively opposed to a Vat increase, they will not want to be seen to be backing a Da-led campaign. It’s not just about Vat.
In a submission to the standing committee and select committee on finance, a group of civil society organisations and Wits University corporate strategy & industrial development programme researchers point out that taxes on excise duties and the fuel levy have risen significantly in recent years, while the general long-term trend in corporate income tax and personal tax (despite recent modest increases) has been downward or flat.
“This indicates that taxes that hit the poor hardest are rising faster than taxes that mainly target higher income earners and companies.”
The increase in social grants does not come close to relieving the additional pressure from these taxes — in large part because a substantial chunk of those most affected don’t qualify for grants. And zero-rated foodstuffs account for only about 45% of average food consumption by the poor.
Like most South Africans I am heartily sick of paying what feels like a lot of tax and not seeing much for it. I’ve been unhappy with even the modest personal income tax increases of recent years largely because they’ve been accompanied by the outlandish and wasteful behaviour of the Jacob Zuma government. I’ve also felt frustrated by the general presumption that ever-increasing social grants are the only solution to SA’S deeply ingrained problems and so must be embraced.
They should certainly not be the only solution, but a regressive tax policy will do nothing more than aggravate the problem. The poor shouldn’t have to rely on the DA to protect them from this.