Banele Ginindza
Cosatu has largely welcomed the tinkering of fiscal reserves to anchor government spending in the newly signed Appropriation Act, but has advocated for direct action on taxing the wealthy, while the Free Market Foundation called for the GNU to show its own hand in fiscal management.
The act, signed earlier this week by President Cyril Ramaphosa, is intended to draw up to R1.1 trillion from the National Revenue Fund (NRF), with 22% of the total being allocated to current payments, 73% to transfers and subsidies, 1.4% for payments of capital assets, and 0.1% for payments for financial assets to meet the requirements of the seventh administration.
It drew the scrutiny of the National Council of Provinces (NCOP) appropriations committee, which had questioned certain provisions for “acts of God”.
Cosatu said while it welcomed the progressive allocations, it had made proposals on where the wealthy could be made to pay their fair share of taxes, including through income, inheritance, estate and luxury imports.
“Many of those that do not pay taxes due are the wealthy with the assistance of tax consultants. This must be tackled aggressively and Sars (SA Revenue Service) given the support,” Cosatu parliamentary co-ordinator Matthew Parks said.
He said Sars needed to be given the resources to improve tax compliance from 64% to 70% by 2025.
Free Market Foundation spokesperson Morné Malan said the act unfortunately seemed to exemplify the broader inability of the GNU to chart a new policy course and reinforced fears that the new government did not have the desire, will or fortitude to adopt a new stance on policy.
National Treasury had been assured of a contingency reserve in the fiscal framework to provide an additional buffer to cater for unforeseeable and unavoidable expenditures such as disasters.
This was in addition to the disaster funding that had already been allocated to certain departments, such as the Department of Human Settlements, which had grants for disaster funding. The contingency reserve was R5 billion for this year, R7bn in the following year, and just more than R14bn after that.
Parks said the public service wage bill, contrary to neo-liberal propaganda, was not out of control at 31% of the budget.
“In fact, it has decreased from 35% and this is resulting in rising vacancies among doctors, nurses, teachers, police and other essential, front-line workers. The state cannot run on tables and graphs. It requires skilled professionals if it is to deliver the quality public services society depends upon,” Parks said.
Cosatu also lauded the state for rebuilding Sars, saying that while the additional R1bn allocated to it was welcome, more should be given to Sars to boost tax compliance, tackle customs fraud and thus bring the revenue the state requires.
Cosatu said it welcomed the massive R943bn investments in infrastructure over the Medium-Term Expenditure Framework, in particular in water, roads, schools and sanitation.
“If fully spent, these will help overhaul and modernise ageing infrastructure and provide a massive boost to the economy and job creation. We, however, remain concerned that more should have been done to reinforce and invest in the front-line services society and the economy depend upon,” Parks said.
“We welcome the R253bn debt relief for Eskom and the massive strides Eskom workers have made overcoming load shedding and efforts to ease municipal debt.”
The union said similar intervention plans were needed to stabilise and rebuild other embattled state-owned enterprises (SOEs), in particular Metrorail, Post Office and Postbank, Denel and the SABC. Retrenching 6 000 workers at the Post Office threatened the revival of this entity, it said.
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