Sell assets, cut waste, DA urges Gordhan
INSTEAD of generating R28 billion through tax increases to plug the hole in this year’s Budget, Finance Minister Pravin Gordhan should consider economic growth, selling assets and cutting wastage and expenditure.
The government should also have a comprehensive spending review over the next three financial years to review its expenditure and future priorities.
This was the view of DA finance spokesman David Maynier when he and his deputy Alf Lees shared the party’s “tax alternatives” at a briefing in Parliament yesterday.
“The minister, to his credit, warned that ‘decisive action’ is needed to implement the structural reforms necessary to boost economic growth in South Africa. That is unlikely to happen,” Maynier said.
He said the government could raise significant revenue in the 2017/18 financial year if there was “decisive action” in growing the economy. “An increase of 1% in GDP could raise R18.2bn in additional revenue if you assume a tax buoyancy rate of 1.34%.”
Maynier said substantial revenue could also be raised by selling assets in the stateowned public entities, and selling or leasing 13 043 underutilised land parcels and 1 939 buildings under the control of the Public Works Department.
Entities
This was in line with the presidential review committee on state-owned entities which recommended more private sector investment in state-owned entities in South Africa.
“To illustrate the potential of asset sales to raise revenue, consider that the sale of the government’s stake in Telkom alone could raise about R14.7 billion in 2017/18,” he added.
Maynier said more could be done to cut government spend and eliminate irregular expenditure, which increased from R26bn in 2014/15 to R46bn the following financial year.
“We have to eliminate fruitless expenditure by implementing what Auditor-General Kimi Makwetu calls a less tolerant approach and ensuring there is consequence management for officials who do not comply with the Public Finance Management Act,” he said.
Maynier said their tax alternatives would be proposed in the 120 days when Parliament would be scrutinising departments’ budgets following Gordhan’s budget speech tomorrow.