Budget 3.0: AfriForum welcomes cuts to government spending, stresses that tax burden is still too high
AfriForum considers the Budget Speech delivered by the Minister of Finance, Enoch Godongwana, in the National Assembly today as a step in the right direction. The organisation particularly views the announcement of some cuts to government spending as a positive development but points out that high tax rates continue to hinder economic growth and that further cuts to government expenditure must be implemented.
Although value-added tax (VAT) has not been increased, in real terms personal income tax is still higher than a year ago, as tax brackets have not been adjusted in line with inflation. The increased fuel levy will also place more pressure on businesses and consumers. AfriForum emphasises that the cabinet and various government departments are still too big, which results in an unacceptably high salary bill. Fiscal policy will also have to be targeted at reducing state dependence and increasing the tax base.
According to Louis Boshoff, AfriForum Spokesperson, it is encouraging to see that under the right amount of pressure, the ANC can be forced to change course and that the party’s ideology can no longer be enforced unhindered in the budget. “Today’s budget has several shortcomings, but at least it is no longer a full-blown ANC budget, and that gives us courage,” says Boshoff.
Some ways in which government spending could be cut in the future include: downsizing the cabinet and government departments; reducing salaries and other benefits of high-ranking government officials; cancelling many government advertising campaigns; cutting back on luxuries such as travel and catering; and privatising government institutions.
AfriForum also criticises the government’s poor performance in terms of service delivery, arguing that taxpayers are not receiving the services they are entitled to in return for their tax payments. “AfriForum branches all over South Africa must step in to repair infrastructure themselves and deliver services that have already been paid for through taxes. South Africa not only needs a good budget but also good service delivery that must result from it,” concludes Boshoff.
