South African Communist Party

19 February 2022 Following the State of the Nation Address delivered by the President on Thursday, 10 February 2022, the Minister of Finance Enoch Godongwana will next week table the 2022–2023 fiscal year budget. What do we expect? What do we not expect? Value-Added Tax First of all, we do not expect an increase in the Value-Added Tax as that will be problematic. We say this against the background of right-wing media outlets including foreign news agencies mooting considerations for an increase in the VAT. Some of the propaganda outlets often serve as primers for forthcoming budgets. The neo-liberal trajectory of reducing tax for the rich and increasing the tax that affects the working-class and poor is unsustainable. In a country characterised by crisis-high levels of inequality, it makes sense to assert a more progressive taxation framework for redistribution and to support transformation and development. Extension of the Social Relief of Distress Grant, the need to pursue a comprehensive social security system and poverty eradication strategy The SACP expects the Minister of Finance, Enoch Godongwana, to allocate funds to put into practice the extension of the Social Relief of Distress (SDR) Grant in line with the announcement made by President Cyril Ramaphosa during the State of the Nation Address on Thursday, 10 February 2022. President Ramaphosa announced that the government has decided to extend the provision of the SDR Grant for a further one year, to the end of March 2023. This extension is in line with the call made by the SACP and other South Africans for the government to extend the SDR Grant. However, while welcome, the extension of the SDR Grant does not cover all the aspects of our social policy call. Therefore, the SACP wants to take this opportunity to reiterate those aspects that the government left out without addressing in announcing the extension. Our proposal is that the government should commit to retaining the SDR Grant and adjusting it incrementally in a gradual process towards converting it into a universal basic income grant for unemployed South Africans. This should be an integral social policy provision of a wider imperative to build a minimum income guarantee programme in pursuit of a comprehensive social security system and poverty eradication strategy. When fully developed, the minimum income guarantee programme should also articulate a supportive structure of grants to make successful productive initiatives taken by the people in their communities particularly through, but not exclusively, collective initiatives such as co-operatives. The government introduced the R350 SDR Grant amidst the devastating impact of the global COVID-19 pandemic after public calls, among others made by the SACP, for the government to use social policy to mitigate the impact experienced by the working-class and poor. In the second quarter of 2020, for example, over 2.2 million workers were retrenched in our economy, overwhelmingly by private companies. Industrialisation and the macroeconomic framework The SACP wants to take this opportunity to reiterate its call for a review of the macroeconomic framework to support industrialisation, create employment at scale to radically bring down the crisis-high unemployment level, eradicate poverty, and radically reduce inequality. Instead of continuing with either depriving industrialisation of adequate allocations or cutting industrialisation support, the budget must break ranks with the negative macroeconomic paradigm attitude towards industrialisation. To demonstrate commitment to industrialisation, the budget must increase, rather than continue to reduce, industrialisation related allocations. In South Africa, industrial policy never in reality became an over-arching programme for the government as a whole but was instead reduced in practice to a programme of one department, the Department of Trade and Industry now called…

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SACP Expectations on the forthcoming budget