South African President Ramaphosa's Budget-2018
Richard Pillay | 10 Apr 2018

South African President Ramaphosa presents a budget that has a huge negative impact on poor, unemployed and destitute people. This same budget favours the rich while creating more conditions to further oppress the poor.

Cyril Ramaphosa is a billionaire. His first activity as a billionaire president is to raise taxes that will negatively impact all the poor, unemployed, destitute, pensioners and recipients of state monetary grants. It therefore stands to reason that for the duration of his term of office as president, South Africans can logically anticipate an ever increasing level of poverty, hunger, unemployment, pain and suffering. So was Ramaphosa handed a poisoned chalice that he had to drink from without any choice?

In South Africa, the people responsible for imposing this very unwelcome and reprehensible budget for 2018 includes but is not limited to: former President Zuma, President Ramaphosa, the Cabinet, members of the Ministers' Committee on the Budget, the Provincial Premiers and Finance MECs, and Municipal Mayors, Deputy Minister Buthelezi, The South African Reserve Bank, the South African Revenue Service and the finance family institutions, whoever they are, The Financial and Fiscal Commission, and its chairperson Prof Daniel Plaatjies, Yunus Carrim, De Beer and Phosa and the finance and appropriation, committees, NEDLAC, its Executive Director Mr. Madoda Vilakazi, and representatives of the business, labour and community constituencies on the Public Finance and Monetary Chamber.

Other entities that had a direct hand in the design and preparation of the budget were – President Zuma's pet advisers and friends and many line function departments and their Directors General.

They discussed, designed and crafted this budget and then used Gigaba to announce it to poor South Africans, unemployed South Africans, and masses of people that have no hope of ever being employed. Of course it was also an announcement to the word and certain international monetary organizations.

This is the very same group that designed, crafted and propagated a false story that it is the basic function of small business to create jobs. This false story has been propagated for the past 20 years. In the interim the same group have created a plethora of measures that make it as difficult as possible for start-up businesses to even register a company and or to obtain funding from the same banks that flatly refuse to fund start-up businesses.

The same Industrial Corporation, Development banks and other similar institution that make up the family of financial institutions have consistently funded only large businesses that are owned by their friends and acquaintances while refusing to fund small and start-up businesses.

While the same large businesses are the only ones that are given tenders and contracts by the government, yet they and government impose a huge and unmanageable responsibility for job creation. Government claims to prepare an enabling environment but nothing in this budget enables small and aspiring businesses to enter the main stream economy.

There is something very seriously fraudulent, misleading and unacceptable about this budget. It is time that South Africans and South African voters rejected such a budget with all its inherent prejudices. The designers and crafters of this budget should also receive a very sound rejection.

South Africa is supposed to be an inclusive society but here we find an exclusive club of rich and very wealthy beaurucrats, business people, bankers, parliamentarians, wealthy trade unionists and a host of unnamed people that decide for everyone what is in their best interest. How can such a budget even be considered to be a budget that brings hope? It certainly cannot bring hope to any of the unemployed, poor, low income earners and senior citizens, small businesses and aspiring business people. It does not even bring hope to people that wish to register new businesses.

So in reality, who was this budget designed, crafted and announced for?

Many middle class and wealthy people complimented former Minister of Finance, Gigaba for this budget. Members of Parliament who live in the lap of luxury have also commended Gigaba. Many large businesses have also joined the bandwagon on praising the budget. Economists have given a plethora of figures that they claim proves that the budget is a sober budget that will benefit the economy and all South Africans.

South Africa's unemployment figures are over 30%, The official figures will be far lower, some officials even go to the ridiculous extent of claiming that the unemployment figures is less than 5%

The truth is that the tax base in South Africa is not more than 10% of the population. That alone should provide a correct base from which the unemployment rate can and should be calculated.

The department of labour has a very weird and misleading method of calculating the unemployment rates. They only include people who are still registered with them as unemployed and people who are actively looking or work. They deliberately exclude people that have stopped looking for employment, they exclude unemployed people who are not registered with them, they exclude most school leavers, and they exclude all the illegal immigrants who use the state social services and resources.

In essence they only include a category of people that suit they misleading statistics.

What does our parliament do about such misleading information? They simply accept it and continue as though it were a norm. All the political parties in South Africa accept this fallacy, without question.

What effect will this budget have on ordinary, average, poor and destitute South Africans, small businesses and aspiring business people?

South Africans pay value added tax on the most essential items that include water, electricity, waste removals, and sanitary pads for women, and a host of other items.

Gigaba announced that the value added tax will be increased form 14% to 15% and he justified this increment by stating that –"We have not adjusted VAT since 1993 and it is low compared to our peers. " We therefore decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances." Gigaba did not explain who our peers were and why he made such a comparison. He did not provide an explanation of the unemployment figures nor did he state what "integrity of our public finances meant."

Who then is Malusi Gigaba? He is the former Minister of Home Affairs, Former Minister of Public Enterprises, Former Minister of Finance and he is again now the Minister of Home Affairs. Gigaba is also well known for consorting with and associating with illegal immigrants and criminals. This last set of facts is enough to mistrust anything that is uttered by the said Gigaba.

The increase in the fuel levy by 52 cents, the increase in Vat from 14% to 15 % will have a devastating impact on the poor of this country who are in the overwhelming majority. Essentially it means that the increases amount to, a total increase of 11% on the current levies from R4.78 to R5.30. The General Fuel Levy will increase by 7%, that is 22 cents from R3.15 to R3.37, and the RAF Levy will increase by 30 cents from R1.63 to R1.93 an 18% increase.

Coupled with the VAT increase from 14% to 15%, it will not bring any hope or comfort to the pensioners, low income earners, unemployed and destitute, small business and aspiring business people. This combination of factors together with the general increase in the price of commodities will certainly strike a very hard blow at the category of people mentioned in this paragraph. A blow that many will not recover from.

Gigaba deliberately failed to include the fact that all commodities will experience a price hike due to his measures that he claims will steady the economy. He also failed to explain that even the costs of basic medicines that most senior citizens rely on will increase. The only conclusion that one can reach is that this budget is a very violent, aggressive, uncompromising attack on the poorest of poor in South Africa. None of the measures that he announced will negatively impact on him and his fat cat friends.

It is quite difficult to comprehend how Gigaba and whoever was involved in the crafting of the budget came to the conclusion that launching an economic attack against the most vulnerable in South Africa is good for the ANC, or for the country. If the ANC hopes to retain power in the 2019 general elections, they must consider and immediately implement an alternative to this budget.

According to Jerry Sing a community activist of more than 30 years - "the poor people in this country are once again under attack, this time by the ANC through its violent budget package that will only serve to widen the gap between the poor and the rich. It is truly the time when the ANC begins to do away with its arrogance and refusal to listen to ordinary people and begin to understand that in the polls of 2019, it, the ANC will once again be punished for its arrogance and inability to listen to the voice of the poor."

Mpho Morwapaga a Liberation Military Veteran stated that, "this budget is anti-Military Veterans, anti-poor and anti-unemployed people."

Mpho Morwapaga also stated that, "the benefits that were supposed to be given to Military Veterans is not being done competently and efficiently. He said that this budget does not inspire any form of confidence in Military Veterans and he demanded that the benefits must be provided to Military Veterans without any further excuses or delays. "

Mpho Morwapaga said, "The ANC and all other political parties must remember that in 2019 the voters will express their pleasure or displeasure when they vote, and all this depends on how these political parties conduct themselves during this period. He insisted that Political parties must know that – if an elephant has a long memory, an aggrieved Liberation Military Veteran who is also a voter has an even longer memory and that will be reflected in the ballot box during the 2019 elections."

Usha Jogi a community activist and researcher said that, "this budget is an outrageous cheek on the part of the ANC government when they are aware that at least 34% of the population is unemployed. She also lambasted all other political parties that supported this budget and said that they must get off their pedestals and talk to ordinary people, and then only, will they talk sense."

Usha Jogi stated that, "there are 17 million people that receive a state grant of money. That number alone reflects the unemployment level and we need not fool ourselves because a government department selectively communicates incorrect information to the public, nor should we have confidence in a president even if it is Ramaphosa who wants to engage in sophistry when it comes to the economy and the well-being of its citizens"

She had a stern warning for President Ramaphosa in that she said; "it will not take much more for the general population to turn against the ANC as a political party and former Liberation Movement. When the arrogance of the ruling party reaches a certain level and they refuse to listen to its members and supporters, the general people in their masses will seek an alternative party to support. History in Africa and other parts of the world including India has conclusively demonstrated this phenomenon. Unless the ANC changes its policies and attitude it's on a very fast path to losing."

The 15% VAT and other increases come into effect on 1 April, 2018.

Pensioners receive R1600.00 minus 15% will leave the pensioner with a mere R1360.00 and if a R100 is added to that it still leaves the pensioner with R1460 .00 that is less than the R1600.00 that they currently receive. How is this VAT increment, is supposed to benefit the pensioners? Perhaps the crafters of this budget assumed that every poor South African is unable to analyse the impact of these increments.

The pittance increment of R90.00 he allocated to pensioners will be swallowed up by the 1% increment in VAT and the transport costs due to the fuel levy. Food and other prices will increase so pensioners will become much poorer than they already are. How is that good for the pensioners and how is that good for their families, friends and relatives? Families, relatives and friends will be forced to provide additional financial support to pensioners.

The fraud and theft committed by the Gupta's and all their cronies is haunting us and it will continue to haunt us for a long time to come. The billions that they siphoned from Eskom, Transnet, Minerals and Energy, Agriculture and a whole host of other department and government entities must be recovered in some manner and Gigaba who was their chief implementer now imposes this burden on the whole country with the additional VAT of 1%, so that the whole country now has to pay for the money stolen by the Guptas, with his active role of enabling them.

Raising the Vat rate is the easer and lazier way of trying to resolve a mammoth problem.

The budget should have focussed on Industrialization, reviving the clothing and leather industries that would alone hundreds of thousands of people. No mention was made of those two critical industries. Those sectors have been tacitly outsourced to China by this government. The entertainment industry was also not mentioned yet, they currently employ thousands of people. That sector was long outsourced to Hollywood.

If the government of Ramaphosa is to make any inroads into dealing with the economy it must curb the inflow of illegal immigrants into South Africa. It must deal with corrupt government officials and not target political opponents by using state organs. If Ramaphosa does not adhere to these basic principles, it will not be long before we hear an outcry against him and slogans calling for his recall will resound on all social media platforms. The mainstream media has been praising Ramaphosa consistently but is their uncritical approach warranted?

Gigaba is now busy enabling illegal immigrants that obtained South African documents fraudulently.

The "free Economic zones" again will only benefit the rich and they will serve no useful purpose to South Africans. Chinese so called investors only bring in other Chinese nationals and they also employ illegal immigrants. The reality of this budget will soon rear its ugly head and the so called Ramaphoria will be a thing of the past. This phrase is coined by the mainstream media who are very pro Ramaphosa. The same media were anti Zuma and one can only wait to see what type of inclusive or exclusive game they are busy with.

Data for communications, bank charges, and every commodity and service will experience a hike in prices and these increases will affect the poorest people the most. In short it is not a prudent decision by the ruling party.

In South Africa, one has yet to experience an independent media.

The budget articles that are carried in the main stream media also follow a similar pattern; it seems that there is no room for any real form of dissent.

The SACP – South Africa Communist Party and SAFTU – South African Federation of Trade Unions has expressed very serious reservations about the budget. The ANC Veterans League are totally silent, it is impossible to even get a comment from its president.

The was not a single mention of a very critical sector in South Africa, the non-government organizational sector that has time and again stepped in when government has dismally failed in its most fundamental duties. One does not expect every sector to be mentioned in a budget speech but omitting this sector is a huge problem.

This is an unbalanced budget, and it will produce noting more than other imbalances. It also failed to note and take into consideration what every South African already knows that many households are supported and held together by senior citizens. These are the people that have been hit the hardest by this very strong but hopeless budget that was imposed on South Africa by the Ramaphosa regime.

The ANC, DA and its alliance partner the EFF have demonstrated that they are unable to govern South Africa in a balanced manner. They allow self-made situations to spiral into a crisis and then lurch into knee jerk reactions from one self-made crisis to another. This budget is an illustration of such knee jerk reactions.

Every voter should make a conscious decision that the three political parties, ANC, DA and EFF should be taught a lesson and they should consider voting for the other parties that would include the African Peoples Convention - APC, National Peoples Ambassadors NPA, Patriotic Alliance PA and other smaller Political parties. They should be given an opportunity to play a more significant role. Perhaps the next budget will be more carefully considered and it may be designed for the poor of this country.

The other critical question that needs to be asked and answered is: Is the cabinet that Ramaphosa appointed the best to implement a fundamentally flawed budget because many of the Cabinet Ministers are already negatively compromised.

Research conducted by: Usha Jogi, Jerry Singh, Kiara Singh, Lindiwe Mabena, Richard Pillay, Richard Naraine, Beena Naraine, , Sharmaine Pillay & Natasha Chetty.