2024 Fiscal Framework and Revenue Proposals

The speech below was delivered by Dr Dion George (DA Shadow Minister of Finance) in Parliament yesterday, 13 March 2024, during the debate on the 2024 Fiscal Framework and Revenue Proposals:

Thank you, Chairperson

Our economy grew at 0.2% in 2023. Although the ANC government celebrated this in an attempt to somehow take credit for this tiny bit of growth, that happened despite their incoherent economic policy and gross mismanagement of the public finances, the budget relies on growth of 0.6%. If the ANC remains in government after May, we will see further cuts to the budget for service delivery in October. National Treasury has also stated that another tax increase will be needed to fund the National Health Insurance.

Tax was increased through stealth this year with tax brackets not adjusted for inflation. Government also announced its raid on the Reserve Bank that will start shortly with the first R150 billion. This will not be enough to plug the massive drain of R1 billion per day that South Africans are paying for interest on debt that government accumulated on consumption expenditure and not on infrastructure as could be expected from a functional government.

Government expenditure is not sustainable, no matter how much it raids from the Reserve Bank or it expropriates from the pension savings of hard working South Africans through prescribed assets.

Government has no political will to tackle the big ticket expenditure items that are draining the fiscus faster than revenue is collected. The public sector wage bill is bloated by cadres deployed in a process the ANC is determined to hide from the public, despite the court ordering them to reveal the minutes of these illegal appointments. The State Owned Enterprises, hopelessly bankrupt and unable to deliver electricity, or operate the ports and railways vital to our economic growth get bailed out again and again without any improvement. Misguided preferential procurement adds a massive 20% to government expenditure costs, making the already empowered rich even richer and leaving legitimate beneficiaries behind in poverty.

South African households are battling a never ending government induced cost of living crisis and 5 million children are starving according to the Nelson Mandela Children’s Fund. 81% of households are skipping at least one meal a day. This, in a rich country, suffering under a government that extracts whatever it can for the political elite who belong in jail and not in public office as we see on the ANC lists, initially leaked from the IEC.

We have a growth problem and a spending problem. If these are not addressed, the debt problem will get even worse.

To generate growth, government needs to focus on doing the job it was elected to do and then get out of the way. It also needs to attract foreign direct investment and for that it must ensure that South Africa is an attractive investment destination. It can’t do that when it sends signals from Moscow and acts on behalf of those determined to replace freedom, democracy, the rule of law and a market economy with an autocracy incompatible with our Constitution.

In its ANC bailout budget, government chose itself before the people. Instead on cutting tax on fuel that would lower inflation and reduce the cost of transport and food and instead of expanding the zero VAT rated food basket to include bone in chicken, beef, tinned beans, wheat flour, margarine, peanut butter, tea, coffee, baby food and soup powder; it gave the people nothing but a tax increase and the real prospect of even more cuts to service delivery. By retaining the child grant at far below the poverty line, it is choosing to buy generators for its cabinet ministers instead of nutrition for its children. A sign of a government so drunk on its champagne and caviar lifestyle that it cannot even mention the cost of living crisis. Government does not respond, because it doesn’t care.

After the ANC government loses its majority in May, the climate is going to change. We need to get off the FATF greylist as soon as possible and that needs the political will to prosecute those responsible for illicit cash flows that are driving investment out of our economy. A short while ago the ANC couldn’t pay its staff and suppliers and was getting sued by Ezulweni for over R100 million. Then that suddenly all went away and it is spending lavishly on stadium events and other visible election spending, funded via Qatar. It submitted disclaimed financials to the IEC who never batted an eyelid and its murky donations from Russia and Iran are hidden behind the veil of Chancellor House allegedly. This is not the behaviour of a government committed to financial transparency and getting our country off the list of jurisdictions that are threats to the global financial system.

Despite an incompetent and corrupt government trying to occupy a central position in our economy and remains fixated on building the developmental state that it has proven to be utterly incapable of delivering, there is the hope and that lies beyond 29 May.

We have a young and entrepreneurial population that is waiting to be freed from government policies that have taken away the massive opportunities that our rich country actually can offer. This is the opportunity cost of a broken and failing government.

In our alternative budget, the DA has set out how we will achieve economic growth, resolve the energy crisis, bring debt and spending under control and ensure support for the most vulnerable South Africans. Under these conditions the people of South Africa can become everything that they are capable of becoming. All they need to do, is to make the right choice when they pick their government in May.

Thank you Chairperson.