The National Treasury and SA Revenue Service, Sars, have been instrumental in South Africa maintaining prudent fiscal and monetary positions.
Ons bedank die vorige direkteur-generaal, mnr Lesetja Kganyago, vir sy rol hierin, nie net deur sy bestuurstyl nie, maar ook deur sy kennis, vaardighede en begrip van die fiskale omgewing, ongeag die populistiese druk van links. [We would like to thank the former director-general, Mr Lesetja Kganyago, for his part in this, not only on account of his management style, but also because of his knowledge, skills and understanding of the fiscal environment, notwithstanding the populist pressure from the left.]
We wish him all the best in his new position at the South African Reserve Bank. In the same breath we must congratulate the new director-general, Mr Lungisa Fuzile, on his appointment. Be sure of the support from the DA - provided National Treasury maintains the current prudent and defensible policy directions.
Our economy is not isolated from global economic developments and turmoil. We must therefore keep on taking cognisance of how domestic and global developments and trends might impact on our economy and eventually its citizens, consumers and taxpayers, and what proactive corrective measures are to be taken to prevent catastrophes in our economy.
In this regard, we need to take a look at the current gross domestic product, GDP. Despite its moderate improvement, it's not even close to what is required to create 5 million jobs by 2020. Despite the New Growth Path jargon, we have not seen any substantial job creation. One must question the reluctance to take decisive action to improve the attractiveness and productivity of the labour regime to prospective domestic and foreign direct investors.
Also, we have seen no real, "behind the border" incentives to entrepreneurs and the private sector to progressively invest in manufacturing and labour- intensive industries. The domestic and export markets have much greater growth potential than is currently being explored.
Headline inflation is still on a growing trajectory, with the CPI for April on 4,2%. When we analyse this, it gives us a picture of the positions of ordinary South Africans and taxpayers, which must be kept in mind when deciding on measures to curb this. The biggest contributors to this increase of 4,2% are, firstly, households and utilities at 1,5%, of which water and services were 9,3% and electricity 19%. The second is food at 0,7%, of which oils and fats were 22,7% and meat 8%. The last one is transport at 0,6%, of which petrol was 16,3%.
These inflation drivers are outside the control of ordinary consumers and taxpayers, and the traditional measures to keep inflation low might not necessarily be the best options. The challenge requires fiscal and monetary innovation and creativity. The economy needs to grow and jobs need to be created progressively by the private sector, with proper and effective government support.
Terwyl bogenoemde stygings groot kommer wek, was die bydrae van alkoholiese drank en tabak tot hierdie inflasiesyfer van 4,2% slegs 0,3%. Hiervan was spiritus 4,3%, wyn 4,4% en bier 8,2%. [While the above-mentioned increases are a great cause for concern, the contribution made from alcoholic beverages and tobacco to this inflation rate of 4,2% was only 0,3%. Of this spirits was 4,3%, wine 4,4% and beer 8,2%.]
The excise duties on wine and spirit products have this year been increased by 8,4% and 10% respectively. Contrary to the general perception, will consumers not pay 8,4% more for a bottle of wine? In reality, the increases are largely absorbed by the primary producer in order to keep retail prices competitive. The increases in excise duties since 2005 have definitely contributed to the sharp decline in the profitability and viability of wine farms. A primary producer earns on average 25 cents from a bottle of wine retailing for R26,66, while the government, at the same, time earns R5,01 per bottle of wine from VAT and excise.
The Minister and the National Treasury will have to reconsider their justification for the yearly drastic excise increases to prevent this labour-intensive industry from imploding, which will have catastrophic consequences, especially for BEE projects.
Verlede jaar tydens die mediumtermyn-bestedingsraamwerk het ek sterk kritiek teenoor die Minister en die SAID uitgespreek oor hoe belastingbetalers met gestremdhede, en wat gestremdes as afhanklikes het, behandel is. Die Minister was nie bendruk met my kritiek en verwysing na gestremdes as sagte teikens vir die SAID nie. Ondanks traumatiese interaksie met die SAID aan die begin van die jaar, wil ek tog erkenning gee dat die SAID uiteindelik toegegee het tot die uniekheid van laste en koste verbonde aan die versorging van gestremdes. Persone binne die omgewing van gestremdes was baie tevrede met en bemoedig deur die uitkomste, en dit het ons hoop gegee vir die toekoms. (Translation of Afrikaans paragraph follows.)
[Last year, during the Medium-Term Expenditure Framework, MTEF, I expressed strong criticism against the Minister and Sars with regard to how taxpayers with disabilities, and who have disabled persons as dependants, have been treated. The Minister was not impressed with my criticism and the reference to disabled people as soft targets for Sars. Notwithstanding traumatic interactions with Sars at the beginning of the year I would, however, like to acknowledge that Sars has eventually conceded to the uniqueness of the burdens and costs associated with the care of the disabled. Persons involved in the environment of the disabled were very pleased and encouraged by the outcomes, and this has given us hope for the future.] However, despite this success, the provisions of our Constitution, the UN Convention on the Rights of Persons with Disabilities, UNCRPD, and other administrative legislation, during May 2011 I per chance became aware of yet another effort by Sars to again "close in" on the same group of vulnerable people.
As we speak, Minister, a new list with, yet again, new rules to prevent essential and related costs from tax deduction is being circulated. The worst is that whenever the commissioner publishes this list at a future date, it will be implemented retroactively from 1 March 2011. This is unfair, Minister, and one must question why Sars cannot first do their homework and then implement this in the tax year following the acceptance of such a list.
In mid-May, when I became aware of this, I tried to get clarity from Sars and the commissioner, but with no success. Eventually - only yesterday - I was able to get some tentative feedback while today, 7 June 2011, was set as the last day for input by representative organisations and affected parties.
This new, unwanted and unfair list of qualifying expenditures, and Sars's strategy, was not even discussed with Parliament and its relevant committees. This new list, again, is out of touch with reality and the quest to effectively care for the disabled. It is ignoring many of the critical matters I thought were clarified earlier this year. Again, one size does not fit all! I hope that sanity will prevail in this matter.
Ten laaste wil ek 'n beroep doen op die SAID dat onbetaalde belasting op toegevoegde waarde, BTW, onmiddellik terugbetaal word. Met die sagtevrugtebedryf se pakseisoen wat nou tot 'n einde kom, veroorsaak hierdie BTW net op pakmateriaal dat sommige boere insolvent kan raak omdat banke nie verdere krediet wil toestaan nie. Ek dank u. [Applous.] (Translation of Afrikaans paragraph follows.)
[Lastly, I would like to appeal to Sars that the unpaid tax on value-added tax, VAT, be paid back immediately. With the soft fruit industry's packing season now coming to an end, this VAT on packing material alone can result in certain farmers going bankrupt, because the banks are unwilling to grant additional credit. I thank you. [Applause.]]