Johannesburg - Trade union federation Cosatu on Wednesday criticised Finance Minister Pravin Gordhan for delivering a consumption-based Budget that left little room to support the labour intensive sectors of the economy.
The federation’s spokesman Sizwe Pamla said Gordhan’s Budget fell short of addressing the need to create 100 000 jobs a month to dramatically reduce unemployment.
“The Budget reflects government’s lack of a coherent integrated and targeted job protection and creation plan that would ensure that all South Africans are employed,” Pamla said.
Gordhan said the government would spend in excess of R200 billion this year to drive economic growth.
He said this would increase to R244bn in the 2019/20 financial year.
Gordhan said the expenditure would focus on developing infrastructure and industry, and creating jobs. But Cosatu said the Treasury should be wary of proceeding to implement the mooted sugar tax as this would adversely affect jobs in the agriculture sector.
The sugar tax was fast approaching implementation. “The tax will be implemented later this year once details are finalised and the legislation is passed” Gordhan said.
“We are equally opposed to the government’s rushing into taxing sugar-sweetened beverages without adequately preparing and supporting sugar farms and mills to transition to healthier products,” Pamla said.
Sugar tax
The federation, however, welcomed the increase on the withholding dividend tax rate from 15 to 20 percent. “This is important when only 10 percent of the population own 90 percent of the country’s wealth,” Pamla said. The minister had further introduced a new top personal income tax rate of 45 percent for those with taxable incomes above R1.5 million a year.
The federation also welcomed Gordhan’s call for more co-operation in creating jobs. “We’re encouraged that the minister seems to be prepared to work with all social partners and stakeholders to find solutions to our economic challenges,” Pamla said.