Hon Speaker, hon members of this House, comrades and colleagues, "In the midst of winter I found in me an invincible summer." Inspiring words that echo through the decades and which, for me, so aptly recall one of our greatest heroes, Bhambatha, and the revolt he led. Indeed the Bhambatha Rebellion signifies the beginning of umzabalazo, the end of the wars of resistance and the beginning of the struggle for freedom, and the culture for human rights, which we celebrated yesterday throughout the country, began.
Indeed, the beginning of the 20th century was a time of rapid and radical change, when Africans were dispossessed of their land, their cattle and their agrarian industry and enterprise. It was a time when an unholy alliance, which was struck between the government of the day and the mining magnates, who, through the poll taxes, forced black Africans - referred to as natives - over the age of 18, to work on the mines.
Diamonds were discovered. How many of us don't wear them today and forget how it all happened! Mine bosses wanted large numbers of black people to work for them in the mines. Laws and taxes were designed to force people to leave their land. The most severe law was the 1913 Land Act, which prevented Africans from buying, renting or using land, except in the reserves.
This Act was the beginning of many such pieces of legislation that broke up families and unsuccessfully tried to crush the spirit of the majority of our people. Unwittingly, it created a proletariat and in many ways expedited the liberation struggle. It was during these tumultuous times that the ANC was born in 1912 - the oldest liberation movement. Since then, it has continued the struggle for liberation.
As a liberation movement, the ANC has fought against Bantu education, and for the right to vote for a government of our choice. And we have just all been through local government elections. It is only through an ANC government that we have democratic elections in this country. Say thank you to the ANC. This history is about our struggle for freedom and justice.
There is a strong message of hope, ushered in by the President earlier on this year, spelt out in Asgisa and, once again, mapped out in the budget, by the Minister of Finance. The policies of our current taxation reflect this commitment to address the daunting challenges we face in our country.
Just as Pixley ka Isaka Seme, in 1911, called on Africans to forget the differences of the past and unite together in one national organisation, today we are called upon to work together within the framework of Asgisa. Who in this House does not want to be in harness to eradicate poverty? Indeed, it is through Asgisa that we can address these daunting challenges of poverty.
In 1920 the ANC supported the militant strike of the mineworkers when, for the first time, workers became the motivating force of the national democratic struggle. Interesting enough, just in passing, I want to mention that the SACP then took an active role. It was, of course, among the first nonracial political organisations in the country.
Over the past 10 years we have implemented major tax reforms to broaden the tax base and to introduce equity and fairness. We have reduced marginal taxes and improved the administration of tax collection. The support for accelerated and shared growth in South Africa is supported by taxation measures over the medium term.
Regarding personal taxes, bracket creep has been directly and substantially addressed by 30% and 33% respectively for personal income tax. The middle- income earners have not been forgotten, with the top marginal tax rate now starting at R400 000 a year. When one looks at this figure of R400 000 a year, one is reminded very much that the ANC government now has done everything it can to foster and further the implementation of tax relief. In fact, we are looking at something along the lines of R13,5 billion, which really indicates that we put people first.
By raising the tax threshold on personal income tax to R400 000, the government has in one swift move exempted many low-income earners from income tax. It has also addressed the plight of our people who wish to own their own homes by drastically reducing the transfer duty. This has cut the costs of property transactions.
I want to refer to someone mentioned by one of my esteemed colleagues - a man I have the greatest respect for. I also want to refer to someone who enjoys just the edge of that respect - Prof Katz. All of us listened with great interest to Prof Katz's inputs. I know we all did. We didn't agree with everything that he put forward. In fact, some of us were debating the research and development as at 150, not just over the top, as it were. But let's leave that as it were, and we will come to some debate on it. Let's look at the companies. My heart bleeds for these companies. In 1994 the tax rate was 40%, and then it came down to 35%. We did this as a sign of good faith to try and reassure them. That was not sufficient and, of course, we brought it down to 29%. Having brought it right down to 29% and so on, I look at this and I am not an authority on tax but Prof Katz said ... [Interjections.] ... No, no, you are quite right, but I now listen to the authorities. May I suggest something like what Ben Okri said, "Turn on the light". Read his poem. It was drafted for the millennium, but, of course, it is very relevant today. Katz said, and I quote:
I support the decision not to reduce basic corporate tax. A further reduction of corporate rates unaccompanied by a reduction in the maximum marginal rate of individual tax would result in a very unhealthy tax arbitrage.
As a matter of fact, hon Davidson, you were concurring there. It is not an appropriate time to reduce maximum marginal rates of individual tax. That is not a Fubbs statement; it comes from an esteemed, respected tax authority called Katz.
Now I want to tackle the secondary tax on companies, STC. Here is another thing, I don't claim to have the edge on maths but I know how to count though. That's very useful when you come to STC. If you look at the STC, the ANC government said, "Look, of course, we are going to reduce this. We can't reduce it by that much, but at the very least we can take it down from 25% to 12,5%." That was not enough and I didn't even hear a thank you at the time.
But on top of that, because there were no thank yous, there was a further sweetener. They said: "Now, look guys, take out your calculators and we will tell you what you can do. You have all these dividends coming from other companies. You are all in this together. Before you declare your dividends, have a little discussion on your golf course, and work out as to whether this is the right time to declare your dividends, or whether you should withhold it for a moment and offset it against losses. You can take that decision. It leaves that in your own hands."
Then it was said, "Deduct what you want to pay as a dividend to what you are receiving." Of course, they do this long before you see it in writing. And then, "Maybe you want to offset the losses next year, only if what you are paying exceeds this will you then have to dip into that little resource of yours at the bank." Now, I have never heard of such a hand-out.
The Americans are looking at us and saying, "Hey, you give it to them on a plate!" They are looking at us with envy. But, never mind because we have taken a decision to develop and shape our own tax policy. As I said this morning, complex as tax legislation may appear to be, it doesn't take truckloads of policy before you can take a decision like you would have to do in the United States or the United Kingdom.
Furthermore, to show how lenient we are, we don't make taxation proposals law with immediate effect, but maybe one or two years later. In Britain, just the opposite applies. I think it was in 1913 when they said, "You guys hang on to everything. As soon as the chancellor of the exchequer pronounces, my friends, the guillotine has fallen." We are not like that, because we are equitable and fair.
If I am trying to make this sound as if tax is just a numbers game, it is not. It's all about equity and expanding our minds and contributing to human capital. Look at Tsotsi, the Oscar-winning film, which was in fact made possible to a degree, you could argue, because of the tax rebates. So there we have an ANC government that says, "It's not just a matter of number crunching. Let's promote the film and production industry, and develop our labour-intensive areas in the industry." Really, all I want to say to members who disagree with me is: "Switch on the light, because once you do, you are going to see a lot better and understand a lot better." The ANC government supports this budget. I thank you. [Time expired.][Applause.]