Having described the country as being “at a crossroads” – lower growth, a downward revised economic outlook and serious governance problems – Finance Minister Tito Mboweni yesterday delivered his maiden medium-term budget policy statement (MTBPS).
But to the Budget Justice Coalition (BJC) – an alliance of 20 civil society organisations – the statement failed to address the country’s increasing levels of poverty and inequality.
Commenting after Mboweni’s MTBPS delivery, Gilad Isaacs, co-director of the Institute for Economic Justice and a member of the BJC, said economic stimulus in a time of austerity was “a magician’s trick”.
“Smoke and mirrors do not put food on the table for the poor,” he said.
“The message coming from a government on whose watch massive state capture was effected with dubious links to individuals in the ruling party – to its electorate on whose behalf it governs – this statement of intent declared no intent to alleviate their plight.
“There has been no attempt to redress the impact that the regressive VAT (value-added tax) increase has had in exacerbating people’s hunger and no promise of a better future.
“We hope that any party interested in obtaining a majority of votes in the next election should commit to proving social security coverage for all.
“Economic stimulus and development go together.”
While fiscal constraints were blamed on corruption scandals, malfeasance and the VBS Bank cash heist, Isaacs said that had happened “under the watch of the same government”.
“Not once have we heard a penitence, a mea culpa of this government of the people, to the people.
“Rather, those most dependent on government delivery – the poor – are being expected to tighten their belts once again,” he said.
He added: “Our rulers seem to marvel at the slow economic growth and lack of economic turnaround.
“According to the 2017 general household survey, 44% of households consumed less than R2 500 per month.
“The president’s recovery plans set out in the minister’s speech are useful, but not a single plan referred to the actual wellbeing of ordinary people.
“Our unemployment rate conservatively sits at 27% or 6 million people of working age.
“This definition excludes a discouraged 2.8 million workseekers and other people outside of the labour force making up an additional 12.5 million.”
The coalition said it would have welcomed a pledge “in zero-rating 19 essential food items, instead of three”.
“Zero-rating three items is certainly not enough to cushion people against the impact of the VAT on increases in low-income households,” said Isaacs.
BJC welcomed “the real commitment to resolve the governance crisis within the South African Revenue Service as well as the additional R1.4 billion to improve systems”.
The BJC said it would continue to engage the parliamentary finance portfolio committee and National Treasury to address “the pressing needs of the poor”.