17 February 1999
The SACP welcomes the 1999/2000 budget because it prioritises service delivery to the poor and the creation of new poverty relief and employment creation programmes. It is a budget that prioritises social delivery over meeting rigid budget deficit targets. This budget is one more decisive step in the ongoing transformation programme of the ANC-led Alliance, and echoes the call of the ANC President, Thabo Mbeki, for more transformation, quicker.
It is a budget tabled at a time of continuing crisis in the capitalist world economy. The Budget Review confirms that our country, along with most other developing countries, has been profoundly affected by the continuing crisis of global capitalism. We are pleased at the recognition of this reality by the Minister of Finance. As the SACP we are of the view that stronger contra-cyclical measures and financial regulation is needed to cushion our country from this international crisis, in order to advance our reconstruction and development goals.
On the revenue side we welcome the fact that government has not heeded the call from some quarters to increase VAT, and that it has provided tax relief for low-income earners. We are, however, unhappy about the tax relief given to capital and higher income earning individuals, who, in our view, should continue to make a significant and justifiably disproportionate contribution to the reconstruction and development of our country. The fact that a person earning R500 000 will pay R1475 less in 1999 than in 1998, while someone earning R20 000 will pay only R195 less than last year, suggests a need for vigilance to ensure that our tax system becomes more progressive. The SACP is likewise not persuaded that a reduction in company tax from 35% to 30% is warranted.
The SACP is particularly pleased that the Minister of Finance has strongly warned the micro-lending industry about their super-exploitation of the working class and the poor. The industry is parasitically feeding on the desperation of the working class and the poor. We welcome the fact that public hearings are to be held soon to focus on the question of micro-lenders and excessive bank service charges. We hope that these hearings will lead to strong measures to protect our people from the loan sharks. We call on our people and their organisations to actively participate and make representations on these issues when parliamentary hearings are held.
Finally, we note that the Government Employees Pension Fund will receive further contributions from government this year. The Alliance Summit agreed that this issue needed further urgent attention. As the SACP we will, therefore, make further representations in the Alliance on this matter, in line with our belief that this pension fund requires a fundamental re-think and restructuring as part of our overall programme of debt reduction.
Issued by the SACP Department of Information & Publicity
E-Mail: sacp1@wn.apc.org
South African Communist Party Head Office
COSATU House
No. 1 Leyds Street - 7th Floor
Braamfontein 2001
Republic of South Africa
(Tel: 27 11 339-3621/2)
(Fax: 27 11 339-4244)