Right now, Finance Minister Godongwana is preparing for his Mid-Term Budget Policy Statement (MTBPS). Together with National Treasury, the minister has proposed increasing Value Added Tax (VAT) by 2% and more budget cuts to extend the R350 grant [1]. If we don't act quickly to stop this, it will mean a livelihood disaster for the marginalised majority.
The cost of living is too high
Millions of households in Mzansi cannot afford basics such as food and often have to sacrifice one basic need for another. More than 2 million South African households experienced hunger in 2021, and 3.1 million had no adequate access to food [2]. Twenty-seven percent of children in Mzansi are stunted and malnourished [3]. We've seen mothers take their own lives and their children's lives because they could not bear the brunt of poverty [4].
Food prices are soaring, yet big businesses continue increasing prices and making big profits. When food prices are unaffordable, people opt for cheaper options that are often unhealthy, leading to various health complications. Increasing VAT will only worsen the unbearable cost of living for the marginalised, the majority being black women. But with more pro-poor budgets that allow more money into homes and a reduced cost of living, people can access healthy food and other basic needs.
A VAT increase undermines social grants
Social grants, including the R350 grant, are not enough to sustain livelihoods. A VAT increase will undermine the purpose of grants, pushing people into deeper poverty. We need budgets that allow people to do more with their lives while they live in dignity, further empowering them to earn income independently.
Budget cuts will undermine public free health and education services
Mzansi is facing a shortage of teachers [5] and nurses [6]. This is due to inadequate funding that has also caused a decline in the quality of services provided to the public. National Treasury has been issuing budget cuts for years, and more budget cuts will only worsen the situation, especially for the health and education sectors. The marginalised majority who rely on free public services, primarily low-income black women, will be most affected by these budget cuts.
The government is under huge pressure to address the cost of living crisis, but Finance Minister Godongwana wants to make it worse with austerity measures. A VAT increase and budget cuts are not the answer. Terrible decisions happen when our leaders think we are not looking, but if enough of us take a stand against this, we can ensure Minister Godongwana thinks twice before he delivers his MTBPS on 1 November 2023.
Letter to decision-maker
Dear Minister Godongwana, we, the undersigned, call on you to prioritise millions of lives in Mzansi who cannot support themselves by stopping the VAT increase and budget cuts. As the Minister of Finance, it is your responsibility to make decisions that are in the best interest of the marginalised majority.
1. Stop the 2% VAT increase. The high cost of living is already unbearable.
2. Stop budget cuts. The education and health sectors face a shortage of public servants and resources. Previous budget cuts have seen a decline in the quality of the free services provided, and further budget cuts will worsen the situation, affecting the availability of the much-needed resources that millions rely on.
3. Furthermore, we call on you to increase social grants with amounts that are enough to curb the cost of living for millions who rely on them to survive.
4. We demand a progressive budget that will help ease poverty and inequality in Mzansi.
References
[1] Treasury’s proposed austerity measures will have a negative impact on most vulnerable, says civil society coalition, Zukiswa Pikoli for Daily Maverick, 18 September 2023.
[2] Millions of SA households go hungry as most say groceries are now their biggest expense, Londiwe Buthelezi for News24, 12 April 2023.
[3] Zero-stunting for South Africa’s children is the key to escaping the inequality gap, David Harrison for Mail & Guardian, 4 November 2023.
[4] Children are dying because of poverty, our moral compass is broken. Ina Opperman for the Citizen, 15 September 2023
[5] ‘SA to eliminate shortage of teachers’, Yogashen Pillay for IOL, 10 October 2023
[6] Massive shortage of nurses in South Africa - here’s how much they get paid, Staff Writer for Business Tech, 12 May 2022.
