The DA's Alternative Budget: how to restore confidence in South Africa
Note to editors: The following statement was distributed at a press conference held in Johannesburg today by Tim Harris MP, DA Shadow Minister of Finance, David Ross MP, DA Shadow Deputy Minister of Finance, and Dr Wilmot James MP, DA Shadow Minister of Trade & Industry.
The DA's Alternative Budget 2013 sets out how we would overhaul taxation and realign expenditure priorities, in line with our Plan for Growth and Jobs, to put South Africa on a path of job-creating growth.
This year our Alternative Budget shows how key policies can be implemented in support of 12 strategic focus areas of the National Development Plan.
It also responds directly to the major concerns of the credit rating agencies that led to South Africa's recent downgrades by detailing a plan to:
- Rebuild the institutional capacity of government to create an environment that is conducive to economic growth;
- Begin to moderate increases in government debt by reigning in the budget deficit; and
- Re-establish investor confidence in our country by showing that the government has a plan to boost economic growth and scale-up actual spending on infrastructure, which has fallen short of promised investment by around 22% for the past three years.
The DA believes that the best way to address these concerns is to support the NDP as a policy platform to underpin job-creating growth.
To this effect, key policy priorities in the DA's Alternative Budget include:
- Setting out to reduce government debt to levels close 35% of GDP in the long term by kicking off an aggressive process of fiscal consolidation. This priority is demonstrated in our commitment to running a budget deficit of 4.3% of GDP in 2013/14, an improvement on general projections of a deficit of between 4.5% and 4.7% for the upcoming year;
- Recovering nearly R30bn in revenue by streamlining government and curbing public sector corruption;
- Boosting the job-creating potential of small businesses through a proposed stimulus package including R9.4bn in tax cuts and R3.7bn in additional support programmes;
- Fully implementing the Youth Wage Subsidy and additional investment of almost R3bn in programmes fostering job creation;
- Rolling out new investments of R4.6bn in education and skills development, including R200m for an in-the-classroom training programme for teachers and funding for roving master teachers;
- Appropriating more than R1bn to promote empowerment and capitalise poor South Africans;
- Keeping South Africans safer with an additional R3.4bn to secure our communities;
- Eliminating broken promises on infrastructure expenditure with interventions to increase actual investment on infrastructure to 10% of GDP.
If implemented, the ideas in the DA's Alternative Budget would address the critical challenges facing the South African economy, help restore confidence in the economy, encourage investment, boost economic growth and reduce unemployment.
Statement issued by Tim Harris MP, DA Shadow Minister of Finance, February 25 2013
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