Thank you very much, House Chairperson, all protocol observed. Following the Minister's 2011 tax proposal submission to Parliament, which was included in the overall Budget, we have had the benefit of extensive inputs from various stakeholders. As a public representative, my speech will therefore highlight some of the key concerns that were expressed to the parliamentary Standing Committee on Finance and express our beloved organisation, the ANC's proposition on the tax proposals as tabled to this House. In general the inputs from stakeholders were positive and the universal sentiment was that the proposals were balanced.
From the ANC's perspective, tax is a foundational building block for a developmental state and an expression of our collective value system of "botho": we must take care of each other. We believe that tax is the most critical source of revenue for a developmental state to be effective in meeting social challenges and directing economic growth.
The magnitude of the challenges that have been outlined by the President in his state of the nation address and the Minister's Budget Speech, such as high levels of unemployment, extreme poverty and inequalities, will require immediate and massive state interventions in this financial year and years to come. Of course, all these interventions will come with financial implications.
In its term of office, our government has committed itself to the creation of jobs to reduce unemployment; promoting the principles of decent work so that the quality of life for workers can be improved; promoting rural development and sustainable livelihoods through measures that will empower communities with land and other appropriate resources; improving the quality of our education system and providing health for all citizens irrespective of their economic status; and fighting crime and corruption.
Our perspective is that the current tax proposals have to be assessed against the extent to which they will be instrumental in addressing these challenges and are consistent with policies that are geared towards building the capacity of the state to achieve its developmental goals. In addition, the proposals have to be assessed against the extent to which they contribute towards the achievement of the New Growth Path, our government's economic strategy earmarked to reduce the unfortunate inequalities in our society.
The following tax proposals, inter alia, have been tabled and deliberated upon through the Standing Committee on Finance: personal tax relief of R8,1 billion; the introduction of a third rebate for individuals 75 years and older - I'm wondering about the fact that the current and ever- decreasing life expectancy rate is lower than this threshold, and it's my hope and prayer that most of us will live to realise this benefit - and the introduction of dividend tax with effect from 1 April 2012, which, of course, replaces the secondary tax on companies.
As I indicated in my introduction, in the hearings that we held there was general consensus that these tax proposals are broadly balanced and acceptable, subject to the submission of details to the ultimate Budget. A number of concerns have been raised regarding the following issues: VAT within a progressive tax system, and a call for its review so that it does not inadvertently harm the poor; carbon tax and its implications for poor households; different views on the appropriateness and the capacity of government to enforce youth wage subsidies, hence the highly publicised concern of it creating a dual labour market system.
From the ANC's perspective, we welcome the proposals and support them, in particular the following: the proposals on the adjustment of the turnover tax for microbusinesses, the review of their rate structure and ensuring that small businesses are able to register simultaneously for both VAT and turnover tax; and an extension of the learnership tax incentive by a further five years when it expires in September this year. I must indicate that most stakeholders stressed the need to consider turning this incentive into a long-term intervention. It is our collective wish that the current review on the matter will yield the deserved result.
These proposals are consistent with the commitment to an integrated approach to policy, as articulated in the new economic growth path document which the Treasury, working with the DTI and Department of Economic Development, EDD, will explore for ways to disincentivise high personal debt, especially for luxury items and high-end products. The Treasury and EDD will also consider how to incentivise company savings, which we define as resource invested, not paid out as dividends, mostly by enhancing investment opportunities. If we look at these proposals against this New Growth Path approach, we must also place our tax proposals around those areas that would provide incentives around savings, stimulation of investments in labour-absorbing industries, skills and youth development.
In conclusion, having used the New Growth Path as a yardstick for assessing the tax proposals, I must say that they are indeed consistent. In particular, they will contribute towards relief for individuals who are hard-pressed economically, especially as a result of rising food inflation. They will assist in encouraging the culture of saving in society, notwithstanding the limitations, and promoting investment in high labour- absorbing areas, youth and skills development through tax incentive instruments. They bode well for our economy, addressing the critical priority of job creation and putting our country on the path to sustainable, inclusive economic growth.
Ka boripana, Tekanyetsokabo e, e maleba. E sekametse thata mo maitlhomong a rona jaaka mokgatlho wa batho o o rotloetsang botho le go tlhokomela bao ba ba se nang bokgoni. Kwa ntle ga poifo le pelaelo, rona re le ANC, mokgatlho wa go ratwa, re tshegatsa Tekanyetsokabo e. (Translation of Setswana paragraph follows.)
[In short, this Budget is appropriate as it focuses on our objectives. As the party for the people, we encourage humanity and caring for the people without skills. Without any fear and hesitation, we as the ANC, the adored party, support this Budget.]
The fiscal framework shows that the ANC's stance is one of caring for the people. It is morally correct. This is more of an expansionary Budget, dearly needed to alleviate our current developmental challenges, and is therefore wholeheartedly supported by our beloved organisation. We couldn't agree more with the call that this Budget be followed through by an alignment of all state structures and subsidiaries with the same common development agenda.
What we are emphasising here is "follow through". We need to ensure that as various subsidiaries and structures of government we "follow through" so that we share the same common developmental agenda. Following through is always important. Even golfers know that if you don't follow through on a shot, you will not have direction and you won't realise the distance you had in mind. Ultimately, you will miss the target. That is why it is important that we must "follow through" and ensure that all structures and subsidiaries of government have the same common developmental agenda. Thank you. [Applause.]