Cape Town - 140219 - The debate on President Jacob Zuma's State of the Nation Address (SONA) entered a second day today as opposition parties and ANC members took turns debating. Pictured is Tim Harris. Picture: David Ritchie

Cape Town - The Democratic Alliance on Monday called for budgetary steps to cut state spending and lower taxes in a bid to curb the national debt and stimulate the economy.

DA finance spokesman Tim Harris said the DA's annual alternative budget - made public two days before Finance Minister Pravin Gordhan tables his - was “firmly centrist” and aimed at bringing the deficit down to four percent of GDP.

It was vital, Harris said, to curtail national debt, forecast to reach 45 percent of GDP by 2017, and to restore confidence in the economy.

“Today our country faces numerous economic challenges and most of them stem from a loss of confidence in the ability of Jacob Zuma's ANC to manage the economy,” he told reporters in Cape Town.

Harris said the DA would aim to slash annual losses of some R30 billion due to graft and maladministration, cut spending on non-essential services - in which he included the department of economic development and a part of the presidency's budget - and restrict public sector increases.

In the last instance, he argued, the government could save R987 million by returning to inflation-related increases and linking civil servants' pay hikes to performance.

The DA argued that it would use the savings in its shadow budget to allocate R9bn more to education, increase spending on infrastructure to 10 percent of GDP, with an emphasis on improving road and rail systems, and gradually increase free basic electricity to 100kW hours per month.

The party said it would introduce a youth wage subsidy in full and spend another R1.8bn on job creation.

Efforts to achieve its stated aim of creating six million jobs over the next decade must be accompanied by overhauling the country's tax regime to encourage investment.

“We don't have to be a cheap tax destination, just one that is good value in terms of tax, and better value in terms of tax administration,” Harris said.

The DA's budget plan envisioned tax cuts to the tune of R8.7bn to “boost the job-creating potential of companies” and also proposed abolishing all remaining exchange controls.

Harris argued these had no worth in containing currency volatility but did deter foreign investors.

“Exchange control right now is standing in front of investors, not currency traders.”

Harris said he would be sad to see Gordhan go if reports were true that this could be his last Budget, but the finance minister was hamstrung because the president did not support his economic vision.

“I sympathise with the position of the finance minister. I generally support him in matters where sometimes his colleagues in government don't support him, but in the context where he is facing significant opposition from the other side of the economics cluster, plus he lacks the support of the president in terms of his reforms,” said Harris.

“I hope this isn't his last Budget, but that does not mean I think this government is progressing on the economy.” - Sapa