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Opposition parties call on Nene to cut fat, not raise taxes

21 October 2015   (0 Comments)
Posted by: Author: The Citizen
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Author: The Citizen

Opposition political parties said Finance Minister Nhlanhla Nene should commit to cutting the fat, and not raising taxes, when he tables South Africa’s medium-term-budget-policy-statement in Parliament on Wednesday.

The parties said on Tuesday they expected Nene to walk a tightrope as sluggish economic growth and an expected increase in the budget deficit would leave him little wiggle room. "In the end, with weaker-than-expected growth, lower-than-expected revenue and higher-than-expected expenditure, it is difficult to see how the Minister will narrow the budget deficit, stabilise public debt and rebuild fiscal space,” said Democratic Alliance MP David Maynier.

"What we need is a medium-term budget policy statement that is ambitious and aimed not just at balancing the books, but also at lifting the economy out of the low-growth, high-unemployment spiral…”

This could be done through avoiding tax increases, and rather "implementing cost-containment measures on consumption expenditure”, Maynier said. Maynier also believed selling off or leasing state assets to raise revenue, reducing the size of President’s Jacob Zuma’s cabinet, and "privatising, or part-privatising zombie state-owned enterprises”, could help government increase its revenue.

Inkatha Freedom Party (IFP) MP Sibongile Nkomo said her party would also support cutting reckless spending, rather than raise taxes. "As a country, we’ve seen a lot of wasteful and reckless expenditure where we are saying a line must be drawn in the sand with regard to corruption and related activities,” Nkomo said.

The IFP also wants the matter of where the money for the building of the proposed nuclear power stations will come from to be raised. "If it happens, it’s going to be paid for by generations to come. We really would like this matter to be addressed,” said Nkomo.

The African Christian Democratic Party (ACDP) said it expected Nene to revise his growth forecast of two percent, which he predicted in February, to be lowered even further. "Clearly the answer is to reduce government expenditure by addressing wasteful and corrupt expenditure which is estimated at R30 billion a year,” said ACDP MP Steve Swart.

"We are not in favour of increased taxes, but do understand the minister has very little room to move. The answer lies in economic growth premised on the speedy implementation of the national development plan and addressing constraints to economic growth such as the power crisis, labour unrest and infrastructure constraints.”

South Africa’s second largest opposition party, the Economic Freedom Fighters, only had one pithy comment on its expectations of Nene.

"We expect Nhlanhla Nene to provide a comprehensive funding solution to the university fees crisis. It is a crisis. That’s all for now,” said party spokesman Mbuyiseni Ndlozi as the party plugged into the headline-grabbing student protests which closed several universities this week.

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