FEDUSA OUTRAGED BY TAX SHORTFALL AS THE MINI BUDGET IS TABLED  

30 October 2019

The Federation of Unions of South Africa (FEDUSA) is outraged that Finance Minister Tito Mboweni prepares to deliver his Medium-Term Budget Policy Statement (MTBPS) on the back of a  tax revenue shortfall of an estimated R50 billion for the current financial year. FEDUSA is deeply disheartened about the effect the massive revenue shortfall will have on Mboweni’s ability to address key economic constraints. Whilst the mini budget is once again being presented against the backdrop of a basket of unfavorable factors, the lack of efficiency and optimal functionality of the South African Revenue Services (SARS) requires questioning, as the R1.422 trillion for the fiscus is now only, over the past five months tracking at 37% of the target, at R519bn.

FEDUSA however cautions and calls on Minister Mboweni to save billions of Rands wasted on exorbitant ministerial salaries and perks in order to drastically reduce the public sector wage bill when he presents the MTBPS. FEDUSA believes that it is irrational for the state to continue fudging policy failure by hiding behind outdated ministerial handbooks that allows it to pay unreasonably high salaries and other fabulous luxuries to ministers and other senior officials at national, provincial and local government levels; in the context of South Africa as a developing nation with a plethora of social challenges such as high unemployment rates, economic inequality and severe poverty. It is high time that the looters of state coffers and the perpetrators identified by the various Commissions set up by President Ramaphosa, be held accountable and pay back the money, to ensure that these much-needed financial resources can ease the pressure on the fiscus.

As the Minister will table his Mini- Budget on an 11 – year high of 29,1% unemployment and on the eve of South Africa’s sovereign credit rating review by Moody’s on 01 November 2019, FEDUSA expects him to announce concrete measures that will rescue the country from a dreary economic growth forecast by most economists, and the World Bank to remain below 1% for the year. Moody’s is the only credit rating agency that has retained South Africa’s sovereign rating at investment. Moreover, Parliament’s approval of a R69 billion Appropriation Bill must outline concrete and tangible measures, coupled with decisive outcomes, to assure investors of action plans that will progressively respond to the needs to the economy.

Immediate corrective action on the number of large SOE’s that are draining the fiscus to the tune of billions of Rands to the determent of the working class that keeps on paying for poor management and accountability can no longer be postponed. Time for action is now as talks and progressive and seemingly stunning summits and plans are not creating jobs, actually these have had exactly the opposite effect.

A case in point is that progress towards achieving the Presidential Jobs Summit goal of creating 275 000 new jobs a year has not only remained elusive but the Framework Agreement commitment by both government and the private sector to save existing jobs by putting brakes on retrenchments has been breached by a flood of Section 189 Notices in the intervening period. These developments not only call into question whether government and business take social partnership agreements seriously, but also defeats the whole logic of the Jobs Summit project.

FEDUSA earnestly calls for more walk and less talk, to reverse the STATS SA Figures which just yesterday pronounced a further jump in the unemployment rate. The time for action is now, to clearly demonstrate exactly how the turnaround strategy will be showcased for implementation.

(591 Words)

 

For interviews please contact

Riefdah Ajam

FEDUSA Acting General Secretary

079 696 2626

Issued by:

Frank Nxumalo

FEDUSA Media and Research Officer

072 637 8096

 Email: research @fedusa.org.za