ANA
Premium Journalist
2 minute read
20 Feb 2017
1:33 pm

Budget must be in sync with ‘radical economic transformation’, says Cosatu

ANA

It wants the rich to be taxed more, not the poor and middle classes.

Members of the Congress of South African Trade Unions [COSATU] take part in a march from King Dinuzulu park, moved along the Pixley KaSeme Street and ended at the City Hall in Durban, in KwaZulu-Natal. The march was part of the nation wide marches which was organised by the union to raise concerns regarding socio economic challenges. Picture Phumlani Thabethe Date 07 October 2015

The Congress of SA Trade Unions (Cosatu) said on Monday it wanted this year’s budget to be dedicated to radical economic transformation and to be in sync with the resolutions of the African National Congress (ANC).

Minister of Finance Pravin Gordhan will be tabling the 2017/18 Division of Revenue Bill, what is known as the Budget Speech, to Parliament on Wednesday.

In a statement, Cosatu said the budget should help start to unpack the president’s “radical economic transformation theme” as announced in the state of the nation address (Sona).

The trade union federation said most of the economic transformation raised issues in the Sona focused on black economic empowerment and the already empowered, but presented no coherent job creation plan and targets by government.

“As the federation, we expect the minister to allocate more resources towards government programmes that are meant to create jobs and adopt policy positions that will kick-start economic growth,” Cosatu said.

“The main priorities and the overall focus of the budget should be about addressing the triple challenges of the high levels of unemployment, deepening poverty and growing inequality.”

Cosatu also said it expected to hear about tax increases only for those who could afford them; the rich and not the working and middle classes.

The federation said it wanted to see an introduction of investment tax credits to encourage local procurement of machinery and equipment and an increase in tax on financial transactions.

“The current socioeconomic situation in the country means that we should not have any increase on VAT or income tax for the lower and middle income earners,” Cosatu said.

“We want an introduction of a progressive tax system, with an introduction of a tax category for the super rich, including an introduction of solidarity tax, whose aim is to cap the growth of earnings of the top 10 percent and to accelerate the earnings of the bottom 10 percent.”

Cosatu said government should deal with tax evasion through conducting lifestyle audits for public representatives and those private individuals in the wealthy bracket, and also consider tax incentives for small, medium and micro-sized enterprises.

On land reform and agriculture, Cosatu said it expected to see additional resources provided to meet land reform targets, as well as support for the sector to enable it to compete with subsidised United States, European Union and Brazilian agriculture products.

The federation also called for clarity on government initiatives, including time frames around comprehensive social security reform, the nuclear energy procurement plan, and the expansion and acceleration of the renewable energy sector.

Cosatu also called for reforms such as shifting the social grant payment function to the Post Bank as a way of building a state financial institution, allocation of more resources to the police and a substantial increase in the health and education budgets.