23 February 2000
The South African Communist Party (SACP) welcomes today’s budget speech delivered by Minister Trevor Manuel. The SACP welcomes the emphasis on the eradication of poverty and inequalities.
We welcome the introduction of capital gains tax and residence based taxation of income
earned elsewhere by South African
companies. This is in line with progressive taxation and redistribution of wealth from the
rich to the poor.
The government has not heeded the call to increase VAT and has provided extensive tax
relief for low-income earners. We,
however, argue that higher income earning individuals should continue to make a
significant and justifiably disproportionate contribution to reconstruction and
development.
The inflation target set (of 3 to 6%) may be too restrictive and may lead to higher
interest rates and thus undermine job creation
and economic growth. Inflation targeting, as part of fiscal policy must be meet
reconstruction and development objectives.
Privatisation of state assets generally results in higher prices and a curtailment of
services to the poor. Therefore, restructuring of state assets must be not be based on
privatisation merely to finance government debt. Instead, it must be based on meeting
reconstruction and development objectives.
The SACP argues for a people's budget, to ensure participation by ordinary people in
the budget and state intervention in the
economy in favour of the poor and the working class. Without this, we cannot address the
immense social and economic inequalities. Therefore, the SACP will work to ensure that
there is effective popular participation in the budgeting process. We
will study the budget and other aspects of government economic policy further for
continued engagement in line with our
belief that economic transformation requires a strategic approach in favour of the working
class and the poor.
Contact
Mazibuko K. Jara (surname Jara), Department of Media,
Information &
Publicity
South African Communist Party - Tel: 27 11
339-3621/2,
Fax: 27 11 339-4244, Cell: 083 651 0271,
Email: sacp1@wn.apc.org