South African Students Congress

SASCO's Response to the 2014 Budget Speech: Intensify working class interests, towards a people's budget

27 February 2014

SASCO is not moved by the 2014 Budget presented by Minister Pravin Gordhan. We think that yet again an opportunity to rid ourselves of neo-liberal macroeconomic policy was missed. We do not think that the ANC resolution on radical economic transformation is taken seriously by our National Treasury. In as much as we welcome the continued commitment by our government to cushion the poor through the social wage and other interventions, we do believe more could be achieved if a stronger hand is exerted on capital in our country.

We remain resolved in our rejection of the neo-liberal underpinnings of the National Development Plan. We are concerned that if government's economic programme is continually aliened with that of the NDP this will deepen the neo-liberal economic trajectory and worsen the situation of the working class. SASCO believe that only an egalitarian developmental trajectory will resolve the triple crisis of poverty, unemployment and inequality. This trajectory should be characterized by radical economic transformation which would see the transformation of ownership patterns of the economy, stronger regulations of capital in the interest of the working class.

In last years budget the Minister announced the youth employment tax incentive, this was after South Africans rejected the Youth Wage Subsidy, and we raised our concerned that this was in fact a backdoor introduction of the Youth Wage Subsidy. We have indeed been proven right; we do not believe that this scheme will address the plight of working class youth.

We do agree with the Minister that the world has not recovered from the global capitalist crisis; the effects of the crisis have been displaced on the working class world over. This is the very reason why we believe our government should regulate capital in the interest of the working class, whilst progressively transforming the economy.

On Education

This administration committed to South Africans to make education an apex priority over the past five years. Certainly we agree that the past five years have seen major improvements in funding of education; 8.8 million learners study in no-fee schools and receive food every school day. Government has rapidly increased student loans and bursaries for both FET and university students during this administration. Many mud schools have been replaced with new structures, our government has done so much for working class and poor students. We welcome the commitment to rebuild 433 schools, this shows that our government cares about the education of the working class and poor who were disenfranchised by Apartheid.

In as much we welcome the intention to increase NSFAS funding, we believe this is not enough to address the plight of many poor students. We are also concerned that the R19.4 Billion that will be spent over the next three years on NSFAS does not indicate a move towards Free Education. This is worrying because so many young people from working class and poor backgrounds will continue to be excluded, whilst little action is taken to introduce Free Education, which is the only solution to this crisis. We are concerned that the Minister is not aligning his budget with the manifesto of the ANC which calls for the introduction of Free Education at all levels. The Minister failed in the past five years to introduce Free Education even though the 2009 ANC manifesto instructed him to do so. Overall we are inspired by the efforts of our government to open the doors of learning for the black working class and poor majority, who were systematically excluded by Apartheid.

Social Expenditure

We welcome the commitment to spend R105 Billion in provision of free basic services to our people which include water, electricity and refuse removal services. We welcome the intension to build 216 000 houses for the poor. This is evidence that the ANC government cares and is committed to change the lives of our people. We are also glad that the government will spend more than eight hundred billion on infrastructure and more particularly on social infrastructure that will improve education facilities, public transport, human settlements and health facilities for our people. South Africans can be sure that under the leadership of the ANC real transformation has taken place and will continue.

We note that our government intends to build better human settlements for mining communities. In as much as this is applaudable, SASCO still believes that mining companies should be forced to improve the living conditions of their employees. Mining companies are absconding from their responsibilities and commitments which are on the Mining Charter. We are happy that our government has increased social grants and has also removed a million invalid beneficiaries from the system. We call on government to ensure that criminal elements within society that loot coffers meant for the poor should be prosecuted and convicted.

Tax Policy

Whilst we welcome the R9.3 Billion tax relief which will benefit the lower middle class, we still believe that an income threshold should be put, so that the higher echelons of society do not benefit. It is a pity that the Minister could not announce decisive measures to increase corporate tax, this means capital will continue to benefit unabated from exorbitant profits which they don't even invest in our country. We believe progressive taxation is important to deal with the high income inequalities that persist in our country. Unfortunately monopoly capital will smile all the way to the bank after this budget. We are also disappointed that yet again there is no pronouncement on our call for the introduction of an Education Tax, focused on the rich, with its sole intention being the provision of Free Education at all levels.

We welcome intentions to increase tax free regimes for lump some pensions of working class peoples who receive up between R315 000 – R500 000. We would have liked to see more stringent measures being put in place to control capital flights and speculation. We believe the state should direct capital to invest its profits in the productive economy in our country, especially to beneficiate our minerals. We are concerned with the ever increasing incentives given to business which have not resulted in job creation; our government should rather exert a stronger hand to direct capital. We welcome efforts to encourage entrepreneurship, but we are disappointed that the Minister did not announce on measures to support and secure markets from co-operatives.

Issued by the NEC of SASCO

For more information contact

Ntuthuko Makhombothi ( President) 071 875 2209
Luzuko Buku ( Secretary General) on 071 879 3258