The Democratic Alliance (DA) on Wednesday said it expected Finance Minister Pravin Gordhan to announce more haircuts for government and reprioritise funding to programmes to employ young people in the country.
DA spokesman on finance David Maynier said a comprehensive spending review, which was on the party’s wishlist ahead of the budget being tabled, would have served the young and unemployed.
“This year the government will be spending R14.3 billion on bloated executives and legislatures throughout the country. We think that there is further scope for spending cuts…that is the only way that we believe that we will be able to sufficiently reprioritise expenditure so that we can fund programmes that give hope young people, especially those who do not have jobs or have given up looking for jobs in South Africa,” said Maynier.
The country’s largest opposition party said while higher income earners would see increased taxes, all personal income tax earners are impacted by the budget.
“The truth is that all personal income tax payers are going to be affected because only R4.4 bln would be raised from the new higher tax bracket for taxable income earners of above R1.5 mln. R12.5 bln will be raised from the balance of personal income tax payments through very limited relief on fiscal drag,” said Maynier.
Economic Freedom Fighters (EFF) leader, Julius Malema, has welcomed the tabling of the 2017 budget, calling it a “well-thought of and balanced budget”, but expressed concerns over corporate taxes.
Gordhan tabled the R1.56 trillion budget in the National Assembly on Wednesday to a rousing round of applause.
Gordhan also announced the creation of a new top personal income tax bracket where South Africa’s super rich, those that have taxable incomes of R1.5 million, or R125,000 a month and above, would pay a tax rate of 45 percent.
Reacting to the budget, Malema said though the EFF did not agree with everything Gordhan presented, the minister deserved to be applauded.
“We think it was a well-thought of budget, it was a balanced budget. He tried to increase lot of spending on poor people within constraints that we are confronted with as a country with a low [economic] growth,” Malema said.
“Our worry is that corporate tax continues to decline. Individuals are the ones that are the biggest contributors to the fiscus of South Africa wherein corporate tax declined by three percent this year.”
Malema said that a radical policy must be introduced to maximum tax collection from corporate while the introduction of state-owned companies in the strategic sectors of the economy would also increase money to the State.
“The licencing of Postbank is good intervention. And if it can be strengthened and capacitated, it must provide services to our people at reasonable interest,” Malema said.
The EFF leader also applauded initiatives for government to get bargains in procurement of goods and services, as well as ensuring that suppliers are paid on time.
“That is a good initiative that is combating corruption, and because people must be paid for what they have delivered. No one should hold payment in exchange for bribes even when people have done a quality job,” Malema said.
“We think that intervention will help to create jobs, will help to grow small enterprises which are job creators.”
Malema ended by saying that Gordhan was giving South Africa some form of hope, and that he must be given support to weather the dark political cloud hanging over him.
“We may not agree with him with regard to everything, but must be applauded for standing up to rot and corruption,” Malema said.
The Inhatha Freedom Party said Gordhan presented an “honest” budget with “everything as it is”, IFP leader Mangosuthu Buthelezi said on Wednesday.
Speaking shortly after Gordhan delivered his budget speech, Buthelezi said Gordhan was frank about the country’s low growth rate and the problems associated with trying to ensure the economy was more inclusive.
“I really don’t think I myself would have been more clever or done better but I think that he was really honest,” he aid.
“He didn’t try some sleight of hand politics, trying to deceive us.”
– African News Agency (ANA)
