IFP PRESS STATEMENT RELEASED BY:
MR NAREND SINGH MP
IFP SPOKESPERSON ON FINANCE

20 February 2008 

The IFP welcomes the 2008/09 Budget as it maintains the balance between pro-poor interventions and continued stimulation of the economy through the reduced company tax rate, increased infrastructure spending and incentivisation of small businesses.

As the IFP we do not want to see a culture of dependency unfold in our country. Sustainable jobs need to be created to face the challenges of unemployment, especially among the youth. Therefore, additional support for small businesses must continue and the concepts of self-help and self-reliance must be promoted and supported.

As far as the economic growth rate is concerned, we accept that we will not be reaching the projected targets, but we hope they will not be any lower than predicted. The economic growth rate, however, will have to pick up substantially over the next five years for us to meet all the demands of a developing society.

The IFP agrees with the Minister of Finance that we are all in this together and we have to "weather the storm".

While we generally welcome the PRO-GROWTH aspects contained in the budget, we are somewhat disappointed that the PRO-POOR side could not be equally matched. We welcome the increase in old age grants to R940, but this still falls short of our expectation of R1000 per month. We also welcome the increase of R20 in the child support grant by October, but in our opinion this is still far too low.

We had hoped that the equalisation of the old age pension age would occur faster, but it now transpires that full equalisation will only occur by 2010. This is very disappointing to the IFP. At the same time we have to welcome the announcement that the means test and its application will be reviewed.

The IFP welcomes the prioritisation of education and health spending, and for crime fighting initiatives. In particular, we are very pleased with the Minister's announcement that Eskom will receive R60 billion over the next five years for its expansion programme and that an additional R2 billion over the next three years will be allocated to support programmes aimed at encouraging more efficient use of electricity generation.

At the same time, the IFP would like to see Eskom top management becoming more aware of their shortcomings and perhaps forego performance bonuses.

The IFP welcomes the increased allocation of R46 billion over the next three years to the provinces. We believe that service delivery should take place at the lowest levels of government; yet we are concerned with unspent grants and the lack of proper monitoring at provincial level. A case in point is the KZN Department of Agriculture where an amount of R80 million remains unaccounted for, and we call on the authorities to immediately launch an in-depth investigation into this issue. 

The IFP welcomes the downward trend in company tax from 29 to 28%, but feel more relief could have been forthcoming to stimulate investment and job creation. We also welcome the adjustments to the personal income tax schedules and raising the threshold to R46 000. We support the increase in the VAT threshold for farmers and small businesses.

In particular, the IFP supports the additional R2, 3 billion to the DTI for supporting small businesses over the next three years and tax incentives of R5 billion in support of industrial development and job creation. We also welcome the additional R1 billion to the EPWP for the next three years. 

Turning to detailed departmental allocations, the IFP supports: 

*     Additional R10 billion over three years for increasing the number of police officers, more prosecutors and judges and magistrates, 40 more police stations and 18 000 more prison spaces

*     The increases in hospital revitalisation grants, HIV / Aids grants and allocations to tertiary health services

*     The increased allocations for more school buildings, early childhood development and educator salaries. 

The IFP is acutely aware that taxpayers deserve value for their contributions to the national fiscus and we therefore demand that the allocations announced by Minister Manuel to government departments are properly spent to improve service delivery, alleviate poverty and stimulate economic growth and job creation. The IFP also wants to see closer monitoring of spending by government departments to ensure full value for money.
 

For more information: 
Mr Narend Singh MP: 083 788 5954