The Economic Freedom Fighters has called out Finance Minister Enoch Godongwana accusing him of lacking necessary understanding of what he needs to do in managing the country’s finances.
The party expressed particular concern with Godongwana’s statement that there would not be a need for more revenue if the Social Distress Relief Grant was to be discontinued.
The EFF said in a statement the minister’s comments suggest he’s confined himself to simplistic positions instead of exploring sustainable ways of raising funds and ensuring the budget is feasible.
“The Economic Freedom Fighters finds it completely disingenuous that the options at the National Treasury’s disposal are either an increase in VAT or a cutting of social relief distress grant as a means to ensure that enough is generated and that the budget is feasible. This attempt to ring-fence the populous to aggressive options such as more borrowing which is not feasible due to our country’s already high debt service costs or increasing VAT or cutting of public spending is reflective of a poor grasp of economic management by a minister who is more of a book keeper rather than someone who uses fiscal policy to stimulate economic growth and job creation,” said EFF National Spokesperson Thembi Msane.
The criticism by the EFF comes as confusion and anxiety continues across South Africa ahead of Wednesday’s scheduled budget speech by Godongwana following last month’s abrupt postponement of the annual address, the first ever.
Political parties and civil society groups have threatened to take to the streets should the minister proceed to impose the VAT increase.
On Monday uMkhonto Wesizwe, the third largest party in parliament and official opposition, marched to National Treasury offices in Pretoria to object to Godongwana’s planned VAT hike which the party said would hurt mostly already strained poor South Africans.
The EFF, MK and others have urged the minister to explore other means of raising required revenue including imposing taxes on big business and the super wealthy.
“The EFF has long stated that various options can be explored to generate revenue and these include the increase in corporate tax and introduction of wealth tax and SARS revenue collection to curb tax avoidance, illicit financial flows that robbed the country of its much-needed revenue.
The proposal by SARS commissioner which suggests anincrease in revenue collection capacity by SARS would yield 800 billion more in revenue generation which is much more feasible than this measly 58 billion rand that can be generated through an increase of that by two percentage points. The intervention of that increase is unfair on thepoor who are already suffering and the ESF remains completely opposed to that as an option,” said Msane.
Parliament has scheduled the budget speech for Wednesday in line with last month’s postponement while the government’s events calendar does not list the speech, marking events of the day as “ unconfirmed”.