Pravin Gordhan’s speech on the nation’s 2017/18 SA budget has earned him much respect from economists and political parties who received his speech with a standing ovation while most members of the ruling ANC received it with sour faces.
The minister had on Wednesday, delivered a R1.56 trillion national budget for the year which according to his illustration, will be drawn majorly from rich South Africans, while the poor receives increase in grants.
He said new top personal income tax rate of 45% is expected from those with taxable incomes of more than R1.5-million. By this he meant South Africans who earn more than R1.5 million a year will form part of a new tax bracket who will add an addition R16.5 billion to the fiscus which will cover a large bulk of the R28 billion shortfall.
Ending his speech, opposition parties like the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) gave Gordhan a standing ovation, showing they loved all he had said.
— eNCA (@eNCA) February 22, 2017
Speaking shortly after the meeting at the parliament, EFF commander-in-chief Julius Malema said though his party may not agree with Finance Minister Pravin Gordhan on everything, but he deserves a standing ovation for standing up to corruption in government.
“If there is only one person who’s giving some form of hope for our people, we must be able to support that person and Pravin comes across as such an individual who’s a unifier, who’s seeking good for our country,” Malema said.
“…The fact that he’s able to stand up to wrong things, to [the] root and call a spade a spade. That’s what is encouraging and such an individual deserves a standing ovation. Such an individual deserves respect … what’s even worse is that some on his side [ANC benches] were not standing up when he finished speaking,” he added.
The party leader also commended the finance minister for the licensing of Postbank, saying it’s a good intervention. He however noted that the bank must be “strengthened and capacitated to ensure it provides loans for poor South Africans at a very reasonable interest rates
Malema also said the 2017/18 SA Budget was well-thought out and balanced but the EFF is concerned that tax paid by companies continues to decline while person income tax increase.
“…He [Gordhan] tried to increase a lot of spending on poor people within the constraints we are confronted with. Our worry is that corporate tax continues to decline and individual are the biggest contributors into the fiscus of South Africa.
“…We think that a radical policy must be introduced where we will maximise collection from corporate and the introduction of state-owned companies in the strategic sectors of the economy will also increase a lot of money to the state,” he said.
— Justice Malala (@justicemalala) February 22, 2017
Like Malema, economists commended the newly introduced 2017/18 SA budget saying he adopted a radical economic transformation, which must be based ‘on sound economic and constitutional principles’.
Analyzing the tabled budget, experts say although the Finance Minister’s speech this year was predictable, he sent a clear message that radical economic transformation must be based on “sound economic constitutional principles”, according to experts.
The 2017/18 budget reminded South Africans of the words in the Freedom Charter, that “South Africa belongs to all who live in it. We face immense transformation challenges – we must overcome the inequalities and divisions of our society. All South Africans must share in a more prosperous future.
Kenneth Creamer, economist at Wits University said given South Africa’s ongoing problem of economic and social exclusion, Gordhan seeks to use the 2017/18 SA Budget to ensure that economic transformation programmes have the widest possible impact and touch the lives of millions of poor South Africans, and do not just enrich a few.
“He reminded South Africa that about two-thirds of the budget each year – that is in this year’s budget about R1 trillion out of R1.5 trillion total expenditure – is used for the realization of social rights.
It is also hoped that the problems that have plagued the higher education sector for the past few years will now be well on the way to being resolved, as government has allocated considerable additional resources to this sector.