On Wednesday, 19 February, Equal Education stood united alongside numerous other social movements, students, community based organisations, trade union federations, and civil society groupings in a mass demonstration against austerity budgeting. We stood united in our vision for a freer, more just society. We stood united in our calls for fully funded public services, for progressive taxation, for a universal basic income grant, for an end to the unemployment crisis, and for an end to budget cuts.
Today’s postponement of the budget speech shows that the government of national unity has a lot to learn from us about unity.
For all its talk of inclusive growth and job creation, poverty reduction, and a capable, ethical, developmental state, this government failed to even table a budget that would give concrete expression to these aims.
Central to the postponement was apparent disagreement about Treasury’s proposal to implement a Value-Added Tax (VAT) hike of 2 percentage points.
As Equal Education, we struggle to fathom how this tax hike could have been considered in the first place. Increasing VAT is another austerity measure. It would immediately increase the cost of living and would significantly constrain consumption. The burden of a VAT increase would be most acutely felt by those who already have little to no income to rely upon. Indeed, VAT has been proven around the world to deepen inequality. As a country with the highest rate of income inequality in the world, this would be unconscionable
Tax increases can be a useful tool to redistribute funds and direct services from the rich to the poor, especially in the most unequal country in the world. They should be guided by the values of equity and transformation enshrined in our constitution. VAT is not a progressive tax. While we have persistently called for government to raise additional revenue to fund public services and stimulate economic growth, these efforts must not place a disproportionate burden on poor and working class communities.
We worry that the decision to delay the tabling of the budget will have negative consequences for the public, for whom state services and income support is crucial. Unfortunately, the GNU remains caught up in infighting and dysfunctionality while price increases erode what little value there is left in the Social Relief of Distress and other grants.
When the budget does get tabled on 12 March, we remain steadfast in our call for public money to be used for the public good. In the spirit of inclusive development and poverty reduction, the Treasury should take more seriously proposals to increase corporate income tax, introduce more wealth taxation measures, and use surpluses from healthy areas of its balance sheet to increase public expenditure.
We reiterate our demands for improved social spending and a budget that promotes and protects the right to basic education. This means increased spending to eradicate school infrastructure backlogs, funding for more teachers to reduce overcrowding in schools, improvements in access to and quality of early childhood development, a fully funded BELA Act, and better allocations to alleviate spending pressures on scholar transport, school nutrition, textbooks, utilities, and psychosocial support.
It is only by prioritising the needs of the majority, poor and working class communities, can we build the state that South Africa desperately needs. The path forward is clear: the GNU should engage meaningfully with progressive society’s proposals to tax the rich, increase social spending, and fully fund public services. Either the government embraces participatory democracy and social justice in its budgeting process, or it will continue to fail the very people it is meant to serve.
For media enquiries contact: Communications Manager Ayanda Sishi-Wigzell
Email: ayanda@equaleducation.org.za
Cellphone: 076 879 3017
