South Africa Budget 2020: The Bigger Picture

Published on 3rd March 2020

A country in which major financial and fiscal policies are decided by a handful of people cannot claim to be democratic. The three main pillars of democracy are: consultation, transparency and accountability. These three tragically lack in how South Africa has been functioning. The three are imperative in eradicating corruption.

For the past 26 years, the budget in South Africa has been decided and drafted by a handful of people; yet the ANC government claims to be democratic. The former leader of the Opposition in Botswana, the late Dr Kenneth Koma, once said that a budget should be drafted with the people and not for them. He once criticised the ruling Botswana Democratic Party for using a budget drafted by the University of Toronto in Canada.

If a budget is an estimate of income and expenditure for a set period of time, how would that handful of people know the priorities and preferences of the majority of the people of South Africa if they didn’t consult them?

For instance, following the tabling of South Africa’s ‘Budget 2020’, the Public Servants Association (PSA) is up in arms because of a proposal to curb the public service wage bill in breach of an agreement with public servants that was supposed to lapse after three years. They will soon go to the streets to protest against the curbing of their salaries. Had there been consultation, the drafters of the budget would not have tampered with the public service wage bill.

Old age, disability and Military Veterans’ grants are going to be increased by R80. At the end of April, the grants will be in the region of R1880 per month. Recipients of these grants were never consulted to find out if those amounts can sustain households for the duration of a month. If one compares that meagre amount with what Finance Minister Tito Mboweni and other Cabinet Minister and Members of Parliament earn per month, the grants are a drop in the ocean. The President, his Deputy, Ministers, Speaker of Parliament and her Deputy and leaders of Opposition parties (especially the DA and EFF) receive between R2million and R1 million per annum.

These lawmakers and other top civil servants such as Directors General and their deputies earn salaries that are a thousand times more than what grant recipients get every month. In a situation like this, they won’t solicit their views. It is very clear that the consultations that are conducted like the Integrated Development Plans (IDP’s) and public hearings are just a pretense. They are just like what Black Consciousness Movement leader Steve Biko called toy telephones where a person is speaking on a toy telephone thinking that there is somebody listening on the other side when in fact there is nobody listening.

The people of South Africa, the uninitiated, have been deceived into believing that income tax has not been raised so they should be happy. However, tax on goods and services has been increased, especially on petrol. It is the same thing as giving with one hand and taking with another. It is like robbing Peter to pay Paul. It is a juggling with words and figures.

Taxation in South Africa is regressive and not progressive. Poor people and those who earn average incomes are going to pay the same amount of tax with millionaires and billionaires. Regressive taxation doesn’t bring relieve to the poor and middle-income people. Monopolies that existed during apartheid and other corporations don’t pay their fair share of taxes. They don’t even disclose fully their profits and some of them are doing business with government and have contributed to President Cyril Ramaphosa’s CR17 ANC Presidential election campaign. The courts ruled in favour of the President to put a gag on the names of those people who contributed millions of Rand to his Presidential campaign in order to conceal their identities making the judiciary apparently complicit in this corruption.

The judiciary is not promoting and supporting transparency to encourage politicians to be accountable to the electorate and to always consult before taking any decisions such as the loan that was apparently spent on building etolls. Pharmaceutical giant Aspen whose chairman contributed about a million rand to the CR17 campaign has already won a contract worth more than a billion Rand to supply anti-retroviral drugs to the government. How much tax did Aspen pay on that money?

An anti-colonial struggle or revolution aims at achieving the right of a people to self-determination not a replacement of the colonial administrative bureaucracy and state paraphernalia by the indigenous administrative bureaucracy and state paraphernalia. The 1994 “miracle” didn’t affect the relations of production altogether. It was a tinkering on the edges. The master and servant relations in South Africa have been left intact because real and effective economic power remains the prerogative and the uncontested preserve of the few who are the white elite and foreign representatives on international monopoly capital, with but an insignificant or token interpolation, here and there, of nominal local participation.

Dr Koma observes that the dichotomy and the social stratification has remained undisturbed and indications are that the dichotomy and social stratification in post-colonial African societies have very much increased. The gap and the disparity between those who have and those who have not, between the rich and the poor, has not diminished, but is very much on the increase. In South Africa this dichotomy takes a racial form.

Given this sorry state of affairs, Tito Mboweni and the ANC government can’t mislead the people of South Africa and the continent that they are responsible for drafting the country’s budget. They get orders from white monopoly capitalists and representatives of international monopoly capital. That is why they do their things with rating agencies in mind which were found to be meddling in the affairs of Australia and declared unlawful by the highest courts in Australia. If South Africa were an independent, sovereign country, rating agencies would not interfere in her internal affairs.

South Africa is not a democratic, independent and sovereign country. Therefore, the ANC government shouldn’t pretend it’s responsible for drafting this country’s budget because that’s simply not true and this fact is written all over that budget and the budgets of the last 26 years.

By Sam Ditshego

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