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Budget Speech: Beautifully Put But Just More of the Same

By

Dr Mario GR Oriani-Ambrosini

Reacting to Wednesday’s Budget Speech, the IFP’s spokesperson on finance, Dr Mario GR Oriani-Ambrosini MP, had the following to say:

There is national consensus on the country’s priorities and we welcome that this year’s budget spends more money in achieving them. In this sense it is an improvement on last year’s.

However, the budget does not break away from a fiscal paradigm which cannot work in the long run. South Africa is a welfare state which dreams of becoming a developmental state. This is a legitimate dream but the budget doesn’t yet concretize this into plan. Conversely it continues to extend the welfare state to industries. Instead of stimulating the creation of viable industries which generate sustainable jobs, the government is spending money to keep existing industries viable.  This is done both with subsidies and with many forms of indirect taxation which we all pay for in the form of higher prices for goods and services we consume.  This is not sustainable.

In its aggregate government expenditure remains ineffective. Government is spending too much money merely to run and sustain itself with only a small portion translating into goods and services delivered to the nation. The doubling of government’s payroll puts at 40%, of the entire expenditure, the cost of administering the State against a private sector’s standard of 12%. This does not include the plethora of consultants necessary to rectify ineptitude. None of this is sustainable.

Against this background one must doubt the success of sweeping new policies, which the IFP endorses in principle. We are in favour of the National Health Insurance, compulsory retirement funds and national social security. But it is an easy predication that programs of this nature administered by a state apparatus, which is both dysfunctional and corrupt, will be a disaster. We need radical measures to reform the State before their implementation. In addition, such reforms should be implemented not through the State but through the private sector so that their actual delivery can rely on private companies, private hospitals and private services which the State should make accessible to all citizens by means of vouchers and indirect payments.

The social safety nets are still insufficient. Nobody can raise a child on R270 per month and a R10 increase of the child grant is lesser than an adjustment to inflation. For food price increases have been higher in percentage than the increases of prices of other products in the inflation basket. The money allocated to HIV/Aids is still insufficient even though one praises the expenditure increase. We also praise the Minister for having found R30 billion worth of government waste, which is still a drop in the bucket of savings that one could bring about by cutting fat and waste in government. Yet one would have expected this R30 billion to go straight into increasing the allocations for social safety nets.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.