Tell our new Minister of Finance to let the majority live in dignity

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Finance Minister Enoch Godongwana

This Thursday, our new Finance Minister Enoch Godongwana will give his first "mini-budget" speech, also known as the Medium Term Budget Policy Statement (MTBPS). If we don't act, this could be another speech that announces steps to help the rich and fails the marginalised majority.

Over the years, Treasury has made public participation in budgets harder and harder. Last week we learnt that Minister Godongwana and Treasury were secretly trying to push through a plan to scrap the R350 grant and derail Basic Income Support [1], even though the President and Department of Social Development have shown support for extending the R350 and basic income [2]. That's why it is so important we send public comments to Treasury and demand a budget that ensures the majority live with dignity, and for Treasury to make public participation accessible.

Food prices continue to rise [3], which has made many basic needs even more unaffordable. Social grants were not enough before the pandemic, and now things are much worse. Together, the amandla .mobi community with community groups and partner organisations have been campaigning for years to increase social grants by taxing the rich. Our leaders didn't agree to all our campaign demands, and the grant amounts were not enough and should have been permanent, but there were steps in the right direction with social grant top-ups in 2020, and the extension and then reintroduction of the R350 grant. Let's make sure our new Minister of Finance knows what we have been demanding and the power of our community.

Our leaders have the power to increase social grants, introduce basic income support and reverse cuts to social spending. For years the Minister of Finance and Treasury have been presented with clear plans to achieve this. It's time they listen, and increased tax on multimillionaires, introduce a wealth tax [4], and increase taxes on sugary drinks, tobacco, alcohol and carbon.

[1] Civil society coalition rejects National Treasury scheme to terminate income support for adults.

[2] Godongwana and the presidency battle over grants. Thuletho Zwane for City Press. 31 October 2021

[3] Household shopping basket price tag rises 10% in a year, Given Majola, IOL, 26 August 2021.

[4] A wealth tax for South Africa, Aroop Chatterjee, Leo Czajka and Amory Gethin for Wits University, January 2021.

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Dear Finance Minister Enoch Godongwana,

Over the past five years, the amandla.mobi community and our partners have been mobilising for justice and dignified life for all by demanding social grant increases and expansion, the introduction of basic income, increased social spending and tax justice. But over the years, we have seen the implementation of anti-poor budgets over and over again, making it harder for millions to put food on the table each day.

Cutting on public spending on social services such as healthcare, education, and job creation negatively impacts many lives. The rising food prices have ultimately made the cost of living too high, and for unemployed people, surviving is hard. Many have shared stories about how anti-poor budgets are affecting them. Unemployed mothers say it is hard to take care of their children, especially now that the Child Support Grant amount is below the food poverty line. Some who are unemployed have been rejected for the R350 SRD grant. With the Old Age Grant, pensioners can barely cover all their basic needs.

We are disappointed and concerned that as the new Minister of Finance who leads the National Treasury, you made public statements based on your personal opinion rather than public mandate and research. You have already stated that you are against a Basic Income Grant, claiming it will create dependency.

Minister Godongwana, you said during your time as MEC for Finance in the Eastern Cape, you put social grants in place and consider this one of the greatest achievements of your career [1]. We urge you not to lose touch with the reality that the majority in Mzansi need enough income and social support to survive.

We call on you to announce in your speech for the 2021 Medium Term Budget Policy Statement that Treasury will implement the below demands:

In addition to our current demands, you must be brought up to speed as to other campaign demands that have been made. We have continuously demanded that the Treasury stop its anti-poor budgeting processes. Together, our members and partners across the country have participated in demanding Treasury implement the following demands:

1. Increase and keep the R350 Social Relief of Distress grant until it is turned into permanent Basic Income Support, valued at the upper-bound poverty line (currently R1335 per person per month) for people aged 18 to 59 with little to no income.
2. Caregivers receiving the Child Support Grant must receive Basic Income Support, as well as refugees, permanent residents, asylum seekers and migrant workers. These campaign demands were part of a petition we are running with Black Sash, who have been working for years on this issue.

Our demands, however, are not limited to Basic Income Support. In line with previous campaigns to increase the Child Support Grant, Old Age Grant, and implement a Maternity Benefit Grant, we call on you to help improve the lives of millions living in poverty by implementing these demands:

1. Increase the Child Support Grant to R950 per child;
2. Increase the Old Age grant to R 2 150 per month;
3. Expand Child Support Grant to include pregnant mothers;
4. Increase all other grants by no less than R300.

Again, as we did before the 2021 budget speech, we demand that Treasury must tax the rich in order to implement the above demands, as well as increase social spending and ensure our public institutions such as the IEC, CCMA, NPA and others, have the funds necessary to serve their mandates. To achieve this, we call on you to:

a. Increase Personal Income Tax for those earning over R1 million annually
b. Commit to introducing an annual net wealth tax at a higher rate of 3% for those with a wealth of more than R3.8 million, 7% for those with a wealth of more than R30 million and 9% for those with a wealth of more than R146 million.
c. Pro-poor interventions and commitments such as dramatically reducing the medical aid rebate and eliminating retirement fund contributions or rebates for those earning over R1 million a year.
d. Increase the Health Promotions Levy (HPL) to 20%, as well as significant tax increases on tobacco, alcohol and especially carbon.

As the new Finance Minister, we will hold you accountable for the actions of Treasury. Economic injustice denies the majority basic dignity, but you have the power to change this. The national budget should be informed by consulting those most impacted by poverty, violence, and injustice, not the super-wealthy.

The current Treasury public participation process excludes the majority. Only those who can easily access the internet and have email can submit public comments through the Treasury website. Treasury’s public participation must be inclusive and transparent.

We call on you to make the public comments process more accessible by implementing the following:

- Ensuring the majority of people are aware that Treasury is accepting public comments that will inform budget priorities. This requires advertising the public comment period and process widely and in multiple languages.

- Ensuring that anyone anywhere can submit public comments for free. To implement this, Treasury must provide a toll-free number that does not require or use airtime, and a process where people can call in, learn more about the budget decisions and have their public comment captured by Treasury staff. At the very very least, Treasury should provide a cell phone number by mid-January 2022, that members of the public can send public comments to through either a phone call, SMS or Whatsapp message. Currently, Treasury only provides a landline that costs airtime to call and excludes the majority, whereas a cell phone number would make submitting public comments slightly more accessible.

Regards,

[1] African National Congress veteran Enoch Godongwana has joined the WSG as a visiting fellow until 2021, Kemantha Govender, Wits School of Governance, 25 October 2018.

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