SA: Much praise for Manuel’s Budget
Finance Minister Trevor Manuel’s 2008/09 Budget received mostly plaudits on Wednesday, but also raised ire in certain quarters.
In his speech to the National Assembly, Manuel announced tax relief, reduced corporate taxes, financial support for Eskom’s power station building programme, a new electricity levy, more social spending, and a boost for job creation.
The tax proposals provided for net relief of R10.5-billion, including R7.7-billion for individuals and a reduction in the corporate tax rate.
Among other things, taxes on petrol and diesel would rise by 11 cents a litre from 2 April, and a new levy of two cents a kWh (kilowatt hour) on electricity generated from non-renewable sources would be introduced this year.
Households and businesses who reduced their consumption by ten percent or more would not be affected by the levy.
Manuel proposed that up to R60-billion be provided to support Eskom’s investment programme, on terms structured to help meet cashflow needs.
Social grant increases this year would match or exceed inflation, with old age pensions rising R70 a month to R940 in April.
The child support grant would be extended to include children up to their 15th birthday, effective from January 2009.
It would also increase by R10 in April and again in October for a total of R220, he announced.
Democratic Alliance spokesperson Kobus Marais welcomed a number of aspects in the Budget, but added that not enough had been done to stimulate growth and job-creation in the face of the draining effects of the electricity crisis.
The DA was pleased about the personal income tax relief, which would help protect the poor from inflation, the reduction in the corporate income tax rate, and steps taken to reduce the tax compliance burden on small businesses.
The conversion of the secondary tax on companies (STC) to a tax on shareholders was also welcomed, but the rate should have been reduced to levels below ten percent.
On the spending side, the DA lauded the R60-billion to help Eskom finance its investment programme over the next five years, and the additional R2-billion over the next three years for promoting more efficient electricity usage, generation from renewable resources and installation of energy-saving devices.
Additional spending of over R10-billion over three years to increase police numbers, increase the number of prosecutors, judges and magistrates, and police and prisons infrastructure was also welcomed.
However, the DA was concerned that the increase in tax on petrol and diesel would further burden businesses struggling in the wake of the energy crisis, Marais said.
Narend Singh of the Inkatha Freedom Party welcomed it as a balanced budget maintaining the balance between pro-poor interventions and continued stimulation of the economy.
Sustainable jobs need to be created to face the challenges of unemployment, especially among the youth.
In particular, the IFP supports the additional R2.3-billion to the department of trade and industry for supporting small businesses over the next three years and tax incentives of R5-billion in support of industrial development and job creation, Singh said.
The ANC praised Manuel’s Budget for its spending on social welfare and public works programmes.
Particularly welcome are the commitments to equalise the pensionable age for men and women at 60 years and to extend the child support grant to children up to the age of 15, the party said in a statement.
We are… pleased to note that significant allocations have been made in favour of industrial policy. Also critical are the further allocations made in favour of skills development and education.
The party said the budget was in line with resolutions on economic growth and job creation taken at its national conference in Polokwane in December last year.
Freedom Front Plus leader Pieter Mulder said Manuel had succeeded in using the Budget, in these times of crises and despondency, to send a positive message of confidence in South Africa’s future.
United Democratic Movement spokesperson Jackson Bici said Manuel had unfortunately delivered the same old same.
Although it seemed positive on the surface, there was no indication of how actual delivery would occur.
Nor does the minister address the fundamental question of why we do not get value for the billions of taxpayer money that is allocated to such important issues as employment, education and the fight against crime, Bici said.
Also among those criticising the Budget, was the SA Municipal Workers’ Union (Samwu), which said Manuel’s stormy budget speech represented continued downpour on the poor and balmy weather for the rich.
The Young Communist League (YCL), on the other hand, welcomed the Budget, saying it was a pro-poor Budget that did not attempt to appease big business.
The YCL view this as a proæ™oor Budget which is underpinned by the needs and aspirations of our people, especially the working class and the poor youth, YCL spokesperson Castro Ngobese said.
Sapa
Tags: cate, downpour, job, spira, spokesperson