Mudslinging ensues: DA Alternative Budget

By Staff Writer
Doctor Dion George, the Democratic Alliance (DA) shadow minister of finance, highlighted that this Alternative Budget was one focused "on creating jobs and opportunities for all South Africans."
The Alternative Budget (though a bit rushed when presented today) highlights different problems the South African economy is facing currently, as well as some helpful solutions.
Three main points were made during the speech: tax increases, the unemployment rates and how to create more jobs, and going nuclear.
The points on tax increases, unemployment and job creation go hand-in-hand with small business, and education.
Tax increases
While there's murmurs of Finance Minister Nhlhanla Nene announcing tax hikes to make ends meet, the DA's response is to claim that if it were in power such increases would not be necessary. It is the first 'mud pie' that the opposition flung and is one that it stressed before last year's Budget Speech. "The DA's response is simple – a tax increase is both an unnecessary and unjustifiable burden on everyday South Africans," says George.
George added that the DA had both a short, and long term plan to avoiding tax increases.
"In the short term, the DA would cut the immense cost of corruption and maladministration and reduce the public sector wage bill through key interventions such as avoiding above inflation rate salary increase, cutting back on salaries to superfluous department, and linking salaries to performance," says George.
This would free up R14 billion, according to George, which is more than the R12 billion government is trying to generate at the moment.
Pre-budget theorists have speculated that VAT, income tax, or fuel-levy might increase to help generate more revenue for government.
In the long term, the DA would create jobs, and strong economic growth, thus having more tax payers, and resulting in government receiving more revenue without raising taxes.
Unemployment and job creation
George threw a second mud pie, highlighting that since President Zuma came into office in 2009, more than 1.6 million South Africans have joined the ranks of the unemployed adding that67.5% of those unemployed are youth (those aged between 15 to 34 years of age).
In order to combat unemployment and help the country to grow, George believes that the DA will create an environment that stimulates the economy and creates jobs.
This in turn will help to raise the tax base (through employment) and create more revenue for government (as mentioned in the point above).
"To achieve economic growth rates that enable job creation, the DA's Alternative Budget focuses on accelerating small business, addressing youth unemployment, boosting trade and infrastructure development," says George.
Another point which was made, was that the DA hopes to increase the funding for the National Student Financial Aid Scheme (NSFAS) to R16 billion.
"So that no student is denied further education because they cannot afford it," says George.
Small, medium and micro-sized enterprises (SMMEs), were also on the DA's agenda.
"The ANC-led government has failed to realise that enterprise development and small business promotion is the most effective way to address South Africa's rampant unemployment and stubborn levels of poverty," said the DA in their budget manual.
The party claims that a DA-led government would focus on financing and supporting SMMEs "with a view of labour absorption and the reduction of poverty and inequality."
This in turn would help with unemployment rates, economic growth rates, and a more stable economy.
Going nuclear
In terms of nuclear, David Ross, the deputy shadow minister of finance, said that the DA is not opposed to nuclear, but pointed out that it is "totally unaffordable."
Ross says that government should prioritise the energy generation, and that with the energy price increase set for this year, South Africans will see a double taxation.
"Conservative industry estimates have suggested that the [nuclear] programme could cost as much as R1 trillion," says the DA.
This is roughly the value of South Africa's total annual revenue, and therefore nearly a quarter of the countries Growth Domestic Product (GDP), highlighted the DA.
Ross added that South Africans have already had to pay for Medupi and Kusile power stations which are not yet up and running.
"This expenditure [on the nuclear plan] follows the combined R326.4 billion spend on the construction of Medupi and Kusile power stations, largely financed through the biggest loan of its kind by the World Bank," says the DA.
The DA highlights that the R1 trillion is not the only cost of the nuclear deal.
"If one assumes that the R1 trillion includes the full cost of the programme, ignoring the inevitable adjustments for currency deterioration or contract price adjustment, South Africa will still need to spend an additional R83 billion per annum," says the DA.
This is due to set-backs, extra costs, and the repayments of the loan. According to the DA, due to the fact that Medupi and Kusile are already five years behind schedule, we can expect that the nuclear plans will also be behind schedule, only resulting in more money having to be spent.
George concluded, "we have sun in South Africa" highlighting the fact that solar is a good way to generate energy. Though, with the maladministration, and missed deadlines, even harvesting the sun could be costly.
The DA's Alternative Budget paints a picture that is easy enough to follow. Their 'silver bullet' to generating extra funding appears to be an end to maladministration and corruption.
But if burdened with the task of actually running the country it's anyone's guess whether they will pull it off without having some problems of their own.
The DA often point to their successes in running the Western Cape but being in charge of the entire country is a different kettle of fish all together.
For more information on the Alternative Budget, our sister website, Moneybags, has an article highlighting more points from the speech, click here.

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