Redistributive budget for 2017

Cape Town – The finance minister warned on Wednesday of “growing impatience and ferment” over post-apartheid inequality and slow growth as he presented a budget that raised taxes on the wealthy.

Pravin Gordhan said his budget was “highly redistributive to poor and working families”, stressing the challenges posed by South Africa’s unemployment crisis and its poor education system.

He announced a new 45% percent income-tax rate for people earning more than R1.5 million a year – up from 41% – and vowed to crack down on tax avoidance.

GDP growth in South Africa was just 0.5% last year, while 35% of the labour force is unemployed or has given up looking for work, and the mining and manufacturing sectors lost 80 000 jobs in 2016.

Gordhan has been at loggerheads with President Jacob Zuma over control of the Treasury, but his budget echoed Zuma’s recent pledges for “radical economic transformation”.

“Economic growth is slow, unemployment is far too high and many businesses and families are under stress,” he said. “The relationships between labour and capital, rich and poor, black and white ... still reflect the entrenched legacy of colonialism and apartheid.”