2003 SA Budget / Media
2003 SA Budget / Media
While agreeing with Ferial that the weekend papers caught up with some
of the glaring omissions in coverage, from a quick qualitative review of
press reports (including the business press), the majority of the
(press) kudos for Manuel were about his ability to create tax breaks,
providing a tax amnesty, etcetera, issues of marginal import to the bulk
of the population.
With the exceptions of coverage of the people's budget, I think
fundamentally in the end coverage of the budget was framed as a
technical issue, presented as a balancing act of government capacity
when the budget is about political choices and full of concessions to
powerful political interests (the amount of articles / radio programmes
where tax consultants salivating at the mouth, were astonishing).
In this regard (for once) Xolela Mangcu was spot-on: In that discourse
among elites (this is used loosely), "so austere have our policies been
that we have been conditioned to celebrate a small blip in social
spending, including a R20 increase in monthly pensions, while the rest
of us enjoy millions".
Sean
From Sean Jacobs
jacobss@newschool.edu
'It seems there is no place for revolutions any more, other than in
archaelogical museum display cases, nor room for the left, except the
repentant left willing to sit to the right of the bankers. We are all
invited to the world burial of socialism. All of humanity is in the
funeral procession, they claim. I must confess, I don't believe it. This
funeral has mistaken the corpse'
- Eduardo Galeano
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>>> "Patrick Bond" 03/03/03 11:06 AM >>>
(I think Legum is absolutely right, here: "The worst aspect of this
budget is that it yet further privileges the financial sector, to which
we are already too much in hock. That sector produces something like a
third of our tax receipts; and it is able to hold us to ransom by moving
capital abroad. An amnesty is given to those who illegally moved money
overseas: they can now bring that money back with virtually no
penalties. And the amounts that can be taken overseas to tax havens and
other off-shore destinations is increased. That gives them even more
influence over government policy.")
SANE Views
Vol.3, No.7, 3 March 2003
A Timid Budget not a Sane One
By Margaret Legum
There are two ways of assessing the 2003 budget. One sees it as
gradually increasing the fiscus' benefits to those who have not been
included in the fruits of economic growth so far. That view sees the
past years of fiscal conservatism as having laid the basis for
continuing growth, so that it is now able to spend in the direction of
excluded people.
In that light, South Africa is now a successful economy in which it is
possible to make a great deal of money, because government taxes are
very low and so is the regulation of capital. It is assumed that the
already successful are the geese that lay the golden eggs, and they are
now able to lay enough eggs to begin to feed the rest.
In that light the budget may be seen as successfully distributing some
of those golden eggs in the form of gradually increasing targeted
welfare benefits - pensions, means tested child allowances, school
feeding, subsidised education, health and water, food relief - as well
as infrastructure construction that uses unskilled labour.
At the same time the golden egg layers are offered new incentives. Tax
relief, costing the fiscus R15.1 bn, is given to everyone. Most of it
goes to people earning less than R250, 000 a year. But 21% of that cost
to the fiscus benefits the really rich. They also get relief for
depreciation, start-ups and write-offs. And companies expanding overseas
can export more of their capital - up to R1 bn.
The understanding that underlies that view of the budget is that, in the
words of the Minister, growth must be 'affordable and sustainable for
twenty years from now'. Poverty reduction he sees as an objective
'while' paying attention to growth - the implication being that the two
are mutually inconsistent. So bringing excluded people into the economy
is seen as a cost rather than an investment.
That provides a clue to the other view of the budget. Like those that
have gone before, this one entirely lacks boldness. The fact is that
this budget is extremely timid in its approach to South Africa's major
economic, political and social problem - poverty, unemployment,
alienation.
That half of our population that is structurally excluded from
contributing could be productively activated by a massive focus on
getting effective purchasing power into poor communities. This would
benefit everyone, including productive enterprise. Lasting growth is
impossible while we waste half our population.
A major start could be made through introduction of a non-means tested
Basic Income Grant (BIG) which is currently rejected on two grounds. One
is the twenty year affordability criterion - as though anything can be
guaranteed in the modern world over that period. Another - that it
introduces a 'dependency culture' - is directly contradicted by the
Minister's quote from Amatya Sen that 'freedom is the principle means of
development'. No one can be more dependent than South Africa's destitute
millions - a BIG would give them some freedom to contribute to
development.
A bold budget would throw the resources of the state into regenerating
local economies rather than keeping export-oriented, highly capitalised
enterprise happy. The Minister could budget for expansion of the
internal market, so that growth is firmly rooted in our own resources.
But that would need a new approach to macro-economic policy making.
The worst aspect of this budget is that it yet further privileges the
financial sector, to which we are already too much in hock. That sector
produces something like a third of our tax receipts; and it is able to
hold us to ransom by moving capital abroad. An amnesty is given to those
who illegally moved money overseas: they can now bring that money back
with virtually no penalties. And the amounts that can be taken overseas
to tax havens and other off-shore destinations is increased.
That gives them even more influence over government policy. We have
created a vicious circle for ourselves - a benign one for them: the
richer we allow them to become, the more we have to pay attention to
their demands. What is needed is more, not less, control over capital
created in South Africa. When will we learn that trying to please
footloose capital is a hiding to nothing.
----- Original Message -----
From: Ferial Haffajee
Some things that struck me about the budget: Trevor Manuel's use of
Amartya Sen's work as the theme through his budget speech - available on
the Treasury's website.
Then, Neva Seidman-Makgetla of Cosatu wrote a column in Business Day;
former SACOB chief executive Kevin Wakeford said it wasn't jobs focussed
enough. The Financial Mail (where I work) argued for a doubling of the
old age pension grant. That's the business press.
The Mail&Guardian's entire critique came from civil society and the
broad left. The Sunday Times today devoted a facing op-ed page to the
Peoples Budget, asking why it's being forgotten by the mainstream; and
it's got a lovely feature on a woman asking "Trevor? Trevor who?"
There's another question that puzzles me and which I haven't yet seen
the left trying to grapple with: how did Manuel manage to get the
highest number of votes at the ANC's national conference if he is the
self-evident public enemy number 1 he is portrayed as on this list?
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False consciousness? Petit-bourgeoisification and Zanufication?
Talk-left/Act-right really works?
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