ANC Parliamentary Caucus Statement on 2019 Budget
20 February 2019
The ANC Parliamentary Caucus welcomes the 2019 budget speech as delivered by the Minister of Finance, comrade Tito Mboweni, in the National Assembly today. Despite the economically adverse climate, this budget offers significant potential to advance the socio-economic transformation of our country. It speaks directly to economic growth, job creation and the reduction of inequalities.
This budget is in line with efforts of the ANC government to cure our country of the corrosive effects of corruption and to restore the integrity of our institutions. The Budget moderates spending and raises the revenues required to contain the growth in national debt, whilst minimizing the negative effects on growth. The Budget presents a roadmap to maintaining the integrity of our public finances, while protecting social services.
We are pleased with the fact that pro-poor spending will once again grow in real terms.
We welcome efforts to improve the health services in the country through the allocation of more staff as shown by the R2.8 billion reprioritized for human resources, and the R1 billion for medical interns. Amongst the allocation for government programmes, an amount of R717 billion has been allocated to Health including the National Health Insurance (NHI).
We are encouraged by the focus on youth, as reflected in the largest allocation of resources towards government's priorities on basic and higher education. Over and above the R30 billion allocated to building new schools and maintaining infrastructure, R2.8 billion is allocated to phase out pit latrines in over 2 400 schools. We support the allocation of R111.2 billion towards fee free education which will ensure that 2.8 million deserving students from poor and working class families have access to institutions of higher education and training.
The Employment Tax Incentive Scheme has been very successful with 1.1 million young people being beneficiaries. Therefore, we welcome the decision to extend it for another 10 years. However, National Treasury needs to do a more detailed study of where these young people end up.
We would have liked to have seen higher increases in social grants to cushion the effects of the VAT increase, however, we appreciate that the severe budgetary constraints dampened the prospects of this.
We certainly welcome the R3,7 billion allocated for emerging farmers wanting to buy land to farm and the R1,8 billion for the implementation of priority land-reform projects. As the ANC in Parliament we remain committed to processing the necessary legislation to give effect to land expropriation without compensation.
In boosting economic development, job creation and diversification, we welcome the allocation of R19.9 billion for industrial business incentives. It is pleasing to note that this will create 25 000 new jobs in the next 3 years. In supporting government initiatives towards small business, the initiative to expand the small business incubation programme by R481.6 million is most welcomed.
Our comrades in government must follow up on the R300 billion investment pledges made at the 2018 Investment Conference and see to it that this converts into bricks and mortar and jobs. In this regard, the ANC in Parliament will certainly hold government to account for this.
In response to the dire situation at several of our State-Owned Enterprises (SOEs) where mismanagement and corruption had severely undermined their effectiveness, we welcome the decisive measures by the state to improve governance, strengthen leadership and restore stability in strategic entities. We further welcome the stress on ensuring that our SOEs function effectively through a variety of transformative measures.
We agree with the Finance Minister that the state's financial support for State-Owned Companies (SOCs) should be on the basis of clear conditions. We support efforts to stabilize Eskom through the R23 billion a year and hope that this will assist in dealing with the current electricity crisis. We further note that this is within a broader contingency reserve towards all SOEs which received an upward increase of R30 billion for 2019/20. It is critical to note that expenditure and tax adjustments have been cautiously designed to counteract the additional allocation for Eskom and revenue shortfall.
It is utterly crucial that public confidence in the South African Revenue Service (SARS) is restored and that it performs far more effectively. We therefore look forward to the appointment of the new SARS Commissioner, and welcome the formation of a new Illicit Economy Unit; the strengthening of SARS IT system; the revival of the Large Business Unit; and the appointment of Judge Dennis Davis to assess the amount of revenue not being collected that is due to SARS.
Given that billions of rands are lost each year through Illicit Financial Flows(IFFs) and the urgent need for revenue, SARS needs to, in cooperation with other state agencies, act far more quickly to reduce IFFs. The ANC in Parliament will continue to pursue this matter vigorously with SARS and the other relevant agencies.
This budget seeks to put the economy on a new trajectory, and we agree with Minister Mboweni that it is "time for us to sow the seed of renewal and growth."
To ensure this, all of us, including government, parliament, business, labour, civil society and the public generally need to play an effective role. Whatever our differences, we need to work together to decisively deal with our common national interests. The ANC in Parliament will certainly play a leading role in this regard.
Issued by the Office of the ANC Chief Whip, comrade Jackson Mthembu.