Cut the Bloat, Don’t Tax South Africans

Dear Editor

The Democratic Alliance is deeply concerned at reports of looming tax increases in tomorrow’s budget. We are in government to protect the pockets of South Africans, not to squeeze them.

There are billions in bloat calling out to be cut which will arrest our deficit. We call on the Finance Minister to consider cutting the following items. These cuts do not touch on social spending, whether grants, education or healthcare. In a country where 55 percent of our people live under the poverty line, the following expenditures aren’t justified:

SETA’s and National Skills Fund – R 23.9 billion

The government spends more than R19 billion on as many as 20 SETA authorities. Many are mismanaged with qualified audits and SIU investigations. Even those that are well managed, we question whether the skills provided are leading to economic growth or jobs. We believe companies are incentivised to fund skills training themselves and do not need the government as an expensive and inefficient intermediary.

The Skills Development Act of 1998 allows the minister to amalgamate and dissolve SETAs. In the short run, this can reduce administration costs for 20 different SETAs with savings returned to the fiscus. The National Skills Fund (separate and distinct from NSFAS), which is allocated around R5 billion, received a qualified audit and it’s not clear that taxpayers are getting anything close to value for money.

National Treasury International Financial Relations expenditure – R 2.9 billion

It is not clear what this funding is for exactly or how it impacts everyday South Africans. These kinds of expenditures are unaffordable during times of extreme financial distress.

SANDF Troop Deployment in the DRC – R 1.8 billion

An unacceptable situation, which cannot continue to be funded. The money saved on ending this deployment is also sorely needed.

Youth Development Agency – R 717 million

There is very little to show for expenditure, a history of lack of finance and accounting controls. Youth development is already baked into the mandate of many government departments and other programs, a separate agency is not needed.

Petroleum Agency South Africa – R 91 million

We are unconvinced that private sector companies would not explore or would not be interested in South Africa’s petroleum resources, regardless of the agency’s existence.
Productivity South Africa – R 63 million

While there are examples of good work being done, it is not clear that R63 million is being optimally used in the interest of all South Africans.

Commonwealth of Learning line item in the Higher Education and Training Budget – R4 million

It is unclear what this expenditure is for or how South Africans benefit.

African Diamond Producers Association – R 5.1 million

Funding these kinds of international organisations seems wasteful in this harsh fiscal climate.

African Petroleum Producers’ Organisation – R 3.1 million

Again, funding these kinds of international organisations seems wasteful in this harsh fiscal climate.

Review of all Public Entities

There are at least 286 PFMA-listed public entities in South Africa. Many depend on a subsidy or transfer from the fiscus. Many were established years ago, but there has never been a review to determine whether they are effective, whether their effectiveness matches their cost and whether any of the entities’ mandates overlap.

If we are going to spend responsibly as a country, we should thoroughly analyse all public entities to cut expenditure where feasible.

South Africans regardless of income are overtaxed and receive pitiful service delivery in return, we cannot enable this dynamic.

Regards

Dr Mark Burke MP
DA Spokesperson on Finance