Finance Minister Malusi Gigaba delivering the budget speech Photo: Screenshot
DURBAN - Finance Minister Malusi Gigaba delivered the annual budget speech in Parliament on Wednesday.

The Democratic Alliance said in a press statement that the 2018 budget hammers the poor and is a legacy of Jacob Zuma's disastrous management of the economy of South Africa. According to the opposition party, the hike in taxes is symptomatic of an ANC government which has not been able to strategise ahead and make essential cost reduction measures to protect ordinary citizens from poverty.

The party added that the announcements made today are nothing less than a huge blow to the poor South Africans because they will curb economic growth and fail to create much-needed jobs.

The VAT increase of 1% and the fuel levy increase will force poor South Africans to pay extra money for basic goods, services and transport.


The party said that instead of taking proper action to cut down on wasteful expenses, the Minister has proposed plans for cost-cutting that will only cut down service delivery, particularly:

1. Provincial Equitable Share, the amount of budget allocated to provinces will be cut down to R4,7 billion.
2. The conditional grants for provinces, mainly Human Settlements and Education infrastructure will be lowered by R13,7 billion.
3. Local government grants will be reduced by R16,1 billion, conditional grants including money used to build schools will be cut be R13,9 billion and indirect grants by R2,2 billion.
4. The police services will be cut down by 2000 personnel.

The DA believes that the decision to reduce funding for the building of schools and employing police officers will only put people in danger and is a bad tradeoff.

The setting aside of the R57 billion over the medium term to fund poor students in higher education may seem like a positive step, however, it is not sustainable according to the opposition. They explained that it will fail to address the true problem and the years of under funding of the sector.

The party said that instead of stabilising the national levels of debt, the debt will continue to rise to more than R3,3 trillion in the next three years and that debt service costs will amount to R592 billion over the medium terms.

The provisional R6 billion that has been allocated for drought relief shows that the National Government does not plan ahead which has lead to the current water crisis according to the DA.

Congress of the People (Cope) leader Mosiuoa Lekota said South Africa Finance Minister Malusi Gigaba's budget speech failed to provide any real solutions to the country's problems.

"Maybe I want to make one paramount statement, this is not giving us a solution. The burden is now being put on the taxpayer and the poor people are now going to suffer."

Using the poor to plug the gap of revenue shortfalls was bad news, the United Democratic Movement (UDM) said on Wednesday.

UDM MP Nqabayomzi Kwankwa joined other opposition parties in condemning an announcement by South Africa finance minister Malusi Gigaba that value-added tax will be hiked by one percentage point.

"When you look at the budget, we're living in difficult times. Some tough choices needed to be made, we understand that," said Kwankwa, but in the same breath he questioned the wisdom of not raising corporate taxes.

If law enforcement agencies were equipped to recoup monies lost by the South African government to corrupt networks of the politically connected, a one percent hike in value-added tax (VAT) would have been unnecessary, the African Christian Democratic Party (ACDP) said on Wednesday.

"If they capacitate law enforcement agencies, they can recover the billions that have been stolen. through state capture and corruption," said said ACDP MP Steve Swart in response to the 2018 budget.

- BUSINESS REPORT ONLINE