The SACP has joined unions in slamming government’s proposals to implement austerity measures in a bid to reign in spending.
National Treasury has proposed cost-cutting measures across the State.
But the SACP said the austerity will hurt the poor and working class in an economy that is sluggish.
It said this was not the time for the National Treasury to call for belt-tightening.
“While we understand the challenges that a stagnation-induced anticipated under-collection of revenue will create for the funding of public programmes, we do not agree that Neo-liberal austerity is an appropriate response any more than it was when we were confronted with several other similar challenges in the recent past.
“The SACP has consistently warned of the vicious cycle that austerity undertaken in the name of ‘fiscal consolidation’ can create in a context of economic stagnation,” it said.
The SACP said on Thursday pro-poor programmes must not suffer at the expense of the cost-cutting measures by National Treasury.
The government should be focusing on putting resources into these programmes, it said.
The poor and working class have recently been affected by the rising cost of living.
The National Treasury should not cut spending, but look at options on the table that have been presented to it by a number of stakeholders.
“Instead of acting as the enforcer of cuts reinforcing stagnation and leading to yet more cuts, the SACP believes that the central task of the National Treasury as administrator of fiscal policy is to mobilise the additional resources required to support key developmental programmes, both on and off budget. This means it can no longer afford to reject out of hand (as has been the case up to now) the myriad of proposals put forward by many heterodox economists.
“This includes tax proposals. In a country that is universally recognised as one of the most unequal in the world and which is also grappling with extraordinary levels of poverty and inequality, it is surely not too much to be considering levying or increasing wealth taxes, targeted taxes on luxury goods (rather than a general rise in VAT) or taxes on at least some of the least productive speculative financial transactions or on dividend payments.
“Off budget, we need to be firmer in efforts to steer part of existing funds towards developmental priorities, particularly in a context where seeking to do this via building “partnerships” with profit-seeking institutions is clearly not delivering adequate results. Prescribed assets, community reinvestment type regulations and various levies all need to be part of the tool-box in this regard,“ said the SACP.
Cosatu, Saftu and other unions met with President Cyril Ramaphosa this week to look at the state of the economy.
They committed to work together to create jobs. The two parties were also concerned about the rate of economic growth.
In the second quarter Statistics Africa reported that the economy grew by 0.6%. This was higher than expected as economists had projected growth of 0.1%
The SACP said the economic recovery plan that was announced by Ramaphosa has not been effectively implemented.
It also said the government must implement this policy.
Politics