Where’s the plan in #Budget2018, Minister Gigaba?
“The last few weeks have brought a new sense of hope to the country with the change in leadership and clear actions that signal the address of corruption and maladministration. However, Budget 2018 leaves the Organisation Undoing Tax Abuse (OUTA) concerned about the practical implementation of the promises,” says Ben Theron, OUTA’s COO.
OUTA is concerned that there is a significant increase in state spending -- including an increase in the cost of the executive -- but Minister Gigaba hasn’t given us a comprehensive plan to eliminate systematic corruption or even costed a budget yet for the already running commission of inquiry into state capture.
“Minister Gigaba is still trying to mislead society by conveniently spouting vague promises without giving clear action to implement them. The extension of guarantees in SOEs such as Transnet, Eskom and SAA, whilst necessary for stability, fails to address the plans to rebuild these institutions and stop future guarantees. The hints of privatisation of SOEs is encouraging and, in this regard, SAA should be disposed of as soon as possible.”
Minister Gigaba has missed an opportunity to shed light on plans to get our economy growing again. The vague statements on the stabilisation of balance sheets of SOEs provide no certainty or confidence that further bailouts will be avoided. SANRAL is to be recapitalised, which underlines the failure of e-tolls.
OUTA is disappointed at the lack of clarity on Government's commitment to reduce waste and eliminate underperforming programmes to address the deficit. OUTA is pleased to see that the Minister managed to find the money to get the free higher education promise started, but he seems to have forgotten that those students will soon need jobs.
The constant increase in personal income tax puts more strain on overburdened taxpayers. The plan to adjust medical aid tax credits to fund a very vague National Health Insurance plan will place taxpayers in a worse position.
“Taxpayers are sick and tired of seeing taxes increase year after year without material improvement in governance. Any increase in the tax burden on society is extremely frustrating against the backdrop of rampant maladministration and corruption,” says Theron.
“We’re positive that President Cyril Ramaphosa will take state capture seriously and reduce corruption. As such, we see the Budget and tax increases as a necessary bitter pill to swallow, courtesy of Jacob Zuma and his ineffective Cabinet,” says Wayne Duvenage, OUTA CEO.
“We trust that government will now be put to task to reduce spending and waste, in order to ensure there are no further increase in taxes in 2019.”
OUTA intends to keep watch on the Budget promises and spending.
“Minister Gigaba, in your speech by saying we must fight corruption and maladministration. Lead by example and resign,” says Theron.
Ben Theron, OUTA COO
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Ronald Chauke, OUTA portfolio manager on energy
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