Response+to+the+2008+Budget+Speech,+NEHAWU+Media+Release


 * NEHAWU Media Release, 20 February 2008**

=Response to the 2008 Budget Speech=

Given the vast developmental challenges facing the country, despite additional allocations over the next three years, in the overall the National Education Health and Allied Workers’ Union, NEHAWU, opposes the Minister of Finance, Trevor Manuel’s continuation with the surplus-budget stance. The effect of this conservative stance is reflected in his failure to make adequate allocations targeted at fighting poverty, creating jobs and mitigating the effects of the electricity crisis on the poor.

In this vein, we express our concerns and opposition to the following announcements in the budget speech:


 * Increases in the tax-free thresholds for interest and dividend income, from R18 000 to R19 000 for individuals under the age of 65 and from R26 000 to R27 000 for those over 65. In addition, the Minister announces further concession to the annual exclusion threshold for capital gains tax – rising from R15 000 to R16 000.

> This goes against the Minister’s firm commitment in 2007, to the effect that more revenue collected was not going to be permanently squandered through tax concessions, as exemplified by his announcement of the reduction of corporate tax rate, from 29 per cent to 28 per cent in this budget. This commitment was made in justification of the surplus budget.


 * Whilst, we welcome the extension of the Child Support Grant to 15 years, we are disappointed that the Minister’s announcement fails to commit government to the extension of the grant up to 18 years over the MTEF period. Instead, the Minister announces conditional measures attached to CSG, without any clear indication as to how these will be implemented - whose monitoring and administration would absorb a lot of resources. This goes against the spirit of the removal of the means-testing on the old age grant, which he announces in the same budget statement. In addition, the gradualist reduction in the age-eligibility of old age men from 65 to 60 dampens the sense of urgency in dealing with poverty within which this decision was announced in the State of the Nation Address.


 * NEHAWU is concerned that the Minister announces a R60 billion loan to Eskom, when government is a 100% shareholder in the entity. This is part of the corporatization which is largely responsible for this crisis, in terms of which public utilities are managed like private enterprises.

> NEHAWU is concerned because it is the poor who are going to bear the brunt of the repayment of this loan. In the same vein, we are concerned that the Minister announces a blanket energy levy on all users, large and small. This comes on the back of Eskom’s higher-than-CPIX tariff hike approved by the National Energy Regulator.

> NEHAWU would support this levy, if it was targeted on large energy users who must bear more responsibility for the reduction of the overall electricity consumption by 10% in line with the National Response Plan. In our view, the poor’s use of electricity is generally proportionally minimal, i.e. based on need rather than luxury.

Finally, notwithstanding our concerns raised above, NEHAWU welcomes:
 * The raising of personal income tax threshold to R43 000 per annum. We believe that an additional R540 would go some way in alleviating the plight of the rising cost of living - which severely impinges on low income workers.
 * Increases in the maximum values of the disability, child support and old age grants, even though these increases are not substantial but inflation related adjustments.

However, we are disappointed that there is silence on the Basic Income Grant, not withstanding the resolution and Programme of Action of the recent ANC’s National Executive Committee - Lekgotla. This matter, like other resolutions of the 52nd Polokwane Conference call for a clear commitment in fighting poverty, reducing inequalities and job-creation to which the budget statement failed to live up to.


 * Issued by NEHAWU Communications Department**


 * For further information, please contact Sidney Kgara (NEHAWU Parliamentary Officer) at 082 455 2614 or email: sidney@nehawu.org.za **


 * Visit NEHAWU website: [|www.nehawu.org.za]**

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