Governance and democracy

Governance and democracy

  • NGOs Warned Over ‘Red Card’ Campaigns

    The Zambian government says it is illegal for NGOs to advocate the removal of a democratically-elected government using potentially dangerous means such as the 'red card' campaigns.

    Home Affairs Minister, Lameck Mangani, says that NGOs should be sober in their criticism, and should concentrate on civic campaigns instead of agitating violence.

    Mangani says the NGOs will not be allowed to hold demonstrations against the Government because that will be a recipe for anarchy.

    However, the NGOs spokesperson, Obby Chibuluma, insists that they will go ahead with the rallies and demonstrations but ensure that everything was done in conformity with the laws.

    To read the article tilted, “Mangani warns NGOs,” click here.

    All Africa
  • Civil Society Briefed on Angolan Constitution

    Angolan citizens, representatives of the civil society in Cacuaco district, Luanda, were briefed by the members of the National Assembly (Angolan Parliament) on the Constitution, promulgated on 5 February.

    The coordinator of the national commission for Cacuaco, Sérgio Joaquim, informed that the document replaces the Constitutional Law used after the independence of Angola, on 11 November 1975.

    The act was attended by MPs, the deputy administrator of the district and the provincial directors of agriculture, rural development, fishing and industry in Luanda, Georgina Tavares and Carlos Botelho, respectively.

    To read the article titled, “Civil society clarified on constitution,” click here.
    All Africa
  • Zambian Govt Investigates NGOs

    The Department of Home Affairs in Zambia has disclosed that more than eight Zambian NGOs are under investigation for alleged money laundering and other illegal activities.

    Minister Lameck Mangani says the government, through the registrar of societies is also scrutinising some NGOs that have drifted from the mandate for which they were established.

    Mangani, who states that the Drug Enforcement Commission commenced investigations of the NGOs late last year following concerns on how the funds were being managed, is also urging NGOs to maintain high levels of accountability. Once the investigations are concluded, the erring NGOs will be prosecuted. 

    To read the article titled, NGOs under probe,” click here.
    All Africa
  • NGO to Present on LGBT and MSM

    The Botswana Network on Ethics, Law and HIV/AIDS (BONELA) is expected to make a presentation at the National AIDS Council (NAC) on findings of an assessment of access to health services by the lesbian, gay, bisexual and trans-gendered community as well as a study on men who have sex with men (MSM) in May this year.

    BONELA says this decision was made by former president Festus Mogae, at the NAC last week, following a query by BONELA as the presentation initially scheduled for May last year, was cancelled at the last minute, without consultation.

    BONELA director, Uyapo Ndadi, points out that, "As an organisation, we are excited that our leaders are now more progressive and open towards issues of sexual minorities which is reflective of sound democratic principles.”

    To read the article titled, “BONELA to present findings of access to health by 'gays',” click here.
    All Africa
  • Report on Kenya’s Post-Election Violence

    A report by the Kenya National Commission on Human Rights (KNCHR) lists more than 200 individuals it accuses of facilitating that country’ post-election violence in 2007.

    Amongst those listed as having either incited, mobilised, transported or funded gangs to attack rival communities are seven Cabinet ministers, several members of parliament and councillors, political activists, retired military officers and even church leaders.

    The report, ‘On the Brink of the Precipice’, says 1 162 people lost their lives and about 350 000 were displaced during the violence, which affected 136 constituencies in six of Kenya's eight provinces.

    To read the article titled, “Poll violence was well-planned – report,” click here.
    All Africa
  • TAC Priorities for 2010: What is Needed to Achieve the NSP Targets?

    HIV, tuberculosis (TB) and malaria continue to be the leading causes of mortality and morbidity in Sub-Saharan Africa. The region remains home to 62 percent of global HIV infections and 72 percent of global AIDS mortality - mainly amongst women and children. It is estimated that there are 33.4 million people living with HIV. Most of them continue to face illness and death if they are unable to access treatment.

    South Africa remains the epicenter of the epidemic. The country has 28 percent of the global population of people with dual HIV/AIDS and TB infections. It has a maturing HIV epidemic, mainly driven by heterosexual sex, multiple concurrent sexual partnerships, intergenerational sex and mother-to-child (vertical) transmission. HIV prevention strategies are not succeeding in cutting the number of new HIV infections – largely because they are unfocused, lack resources, and lack full and ongoing political commitment.

    In South Africa and across Sub-Saharan Africa there are visible signs that we will not meet the targets of achieving universal access to treatment by the end of 2010. Universal access targets were agreed to by G8 members and, subsequently, heads of states and governments at the 2005 United Nations (UN) World Summit. The main reason why we are not meeting the targets is due to a lack of committed national and international leadership to prevent and treat HIV.

    The Treatment Action Campaign (TAC) believes that civil society must remain vigilant and monitor the implementation of HIV and AIDS plans across the region.

    Global Political Commitment – But Will It Last?

    In 2001 we started to see world leaders and African governments committing to fight AIDS/TB and malaria in developing countries. The UNGASS Declaration of Commitment in 2001 was a landmark in global commitment to HIV. The declaration was followed in 2002 and 2003 respectively with the establishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the US President’s Emergency Plan for AIDS Relief (PEPFAR).

    The result is that today five million people that would have died without access to treatment are receiving antiretroviral treatment (ART). 4.5 million orphans have received medical services, education and community care and 790 000 HIV-positive pregnant women have received PMTCT treatment.

    These tangible gains make all the more worrying an apparent change of heart by the most powerful governments of the world, who are contemplating reduced funding for HIV, and creating artificial contrasts between funding health systems and funding AIDS. It is essential that civil society and governments in developing countries unite to challenge cuts in AIDS funding. We also call on our partner organisations in developed countries to highlight the price that we will pay with our lives for their government’s austerity measures.

    Can Political Will in SA Translate Into Action?

    In South Africa, we began to see a turning of the tide in the country’s HIV and AIDS response last year. AIDS denialism was buried. The new political leadership, led by Deputy President Kgalema Motlanthe, the new Minister of Health, Dr Aaron Motsoaledi, and occasionally President Jacob Zuma, has shown commitment to tackling the epidemic. This was reinforced by the appointment of Dr Nono Simelela to lead the South African National AIDS Council (SANAC) secretariat, which TAC welcomed.

    At last, after years of civil society advocacy, South Africa has a strong policy for the treatment and prevention of HIV. This policy aims to treat 80 percent of people who require treatment and to reduce new infections by 50 percent by 2011. The country is currently updating its treatment and prevention guidelines to take advantage of scientific evidence showing that there are more effective methods to reduce mortality and prevent new infections.

    HIV and AIDS must be tackled side by side with strategies to strengthen all aspects of the health system. The government has also developed a 10-point plan to provide strategic leadership and create cohesion amongst stakeholders for better health outcomes through: the implementation of National Health Insurance (NHI) and by overhauling the health care system to improve the management and quality of health services. Priorities include: addressing human resource shortages;  improving development and management; revitalising of infrastructure; accelerating the implementation of the HIV and AIDS and Sexually Transmitted Infections National Strategic Plan (2007-2011); building focus on TB and other communicable diseases; and reviewing the drug policy to strengthen research and development.

    The recent budget put money behind most of these priorities.

    However, the big question is whether funds allocated for health will be sustained, and whether this government truly has the political will to root out corruption and inefficiency in the health system.
    Linked to this is the question as to whether the private health sector will recognise its constitutional duty to fully and extensively support the national effort around HIV prevention and treatment - with financial resources, health personnel and infrastructure.

    Challenges and Priorities for 2010

    1. Scale and Up and Sustain Access to Treatment

    South Africa currently has the biggest antiretroviral (ARV) programme in the world. But still less than half of the people in need are able to access treatment. We recognise that government is trying to address these challenges and we welcome the removal of the long accreditation process to ART clinics, often delaying access to treatment.

    We need to address the substantial implementation challenges at provincial and district level. These challenges include: removing all waiting lists; integrating HIV/AIDS and TB services; decentralisation of care in order to increase access closer to communities; ending drug stock-outs and monitoring availability of essential drugs.

    We need to implement effective strategies to improve treatment adherence – both for the health of patients and to reduce drug resistance and the need for second and third line ART. We need to provide ART regimens with better side effect profiles. We need fixed-dose combinations. We need more social support. We need better education about HIV. We need a more welcoming health system that is sensitive to issues of mental health.

    On World AIDS Day 2009, President Zuma announced a number of updates to South Africa’s treatment guidelines. From 1 April 2010 pregnant women and people who are co-infected with TB and HIV must be provided with ART at a CD4 count of 350 and all infants who test positive should be treated with ART immediately.

    Government must address financial and human resource shortages to ensure the timeous implementation of these changes.

    2. Make HIV Prevention Work

    South Africa has a maturing HIV epidemic, mainly driven by heterosexual sex and mother to child (vertical) transmission. One in three women between the ages of 25-29 is living with HIV (32.7 percent). We need to dispel the myths such as: ‘prevention is easier than treatment’, or ‘we must have treatment over prevention’ - we need both.

    Preventing new infections and AIDS-related deaths amongst young women in South Africa is crucial. Some of the main drivers of our epidemic are early sexual debut, gender-based violence and gender inequality, intergenerational sex, multiple concurrent sexual partnerships and a lack of knowledge about HIV and HIV status. We need to address the lack of access to: prevention of mother-to-child (vertical) transmission programmes, voluntary medical male circumcision, sexual reproductive health services, and male and female condoms.

    It must be noted that prevention messaging starts with our leadership in the South African National AIDS Council (SANAC). As our country’s leader, our President needs to protect us and his family from the scourge of HIV. His behaviour, or that of other political leaders, must not send mixed messages to the public.

    We need to scale up evidence-based prevention interventions if we want to meet the NSP target to cut new infections by half by 2011.

    TAC believes that prevention strategies must prioritise:
    • Scaling up prevention of mother-to-child (vertical) transmission programmes by increasing access to and uptake of HIV counseling and testing, especially before 14 weeks of pregnancy, and proper implementation of the new revised PMTCT protocol and consistent monitoring and evaluation of the programme.
    • Scaling up services that empower young women and girls to negotiate in their relationships. This includes economic empowerment of women so that they are not dependent on partners that put them at risk of HIV infection. Further, prevention tools that are women owned are very limited. South Africa distributes less than six million female condoms per year and there are currently no other women owned prevention measures. Part of the NSP’s aims is to support research development of new prevention tools that will help reduce women’s vulnerability to HIV.
    • Scale up the implementation of voluntary male medical circumcision by implementing pilot sites in KwaZulu-Natal, Eastern Cape and Western Cape. The Global Fund and PEPFAR are committed to funding this intervention which has the potential to greatly reduce new infections both in men and women.
    3. Increase Resources for Health

    South Africa is aiming to scale up treatment and prevention services through its revised guidelines. Scaling up services demands: addressing the human resource capacity constraints and the introduction of task shifting, increasing financial resources and implementing needs-based budgeting, and securing affordable essential drug prices.

    The 2010 ART tender must be for the drugs that are to be included in the new first line regimen. It must promote adherence by prioritising fixed dose combinations and co-packages.

    Ignoring TAC’s advice in the last tender led to South Africa paying avoidably high prices for drugs - making local and international pharmaceutical companies rich. The new tender process is a very good opportunity for South Africa to fight for lower prices for ART. The UNITAID patent pool is a new opportunity that all drug companies should make use of to ensure a sustainable and sufficient supply of life saving drugs.

    If it is devised and implemented properly, the proposed government plan to reform health funding and delivery through a system of National Health Insurance (NHI) could ensure equity in health care provision. The private health system must be regulated to control costs and to require it to share the costs of expanding human and financial resources to the poor. South Africa’s universal health plan should keep the promise of the Constitution that says ‘everyone’ should have access to health care services – a right that should not be based on their income. But ‘everyone’ must include all people in South Africa. TAC will fight any plan to turn our backs on the health needs of refugees and undocumented migrants. To be able to introduce NHI, South Africa will have to tackle current human resource capacity problems, management challenges and systematic problems.

    4. Let SANAC Lead with Action

    This year must be a year of action because we have to report on our universal access to treatment targets by the end of 2010. Secondly, we need to implement the recommendations that came out of the NSP mid-term review to ensure we are on track.

    SANAC must be turned into an efficient and cost effective statutory body. Each sector and government ministry should demonstrate accountability, transparency and action.

    A priority must be to strengthen the provincial, district and local AIDS Councils to implement our targets locally. Establishing functioning AIDS Councils should be made part of the performance agreements of the president, premiers and mayors, and be assessed by SANAC.

    Every person in South Africa should take part in the HIV testing and counseling campaign - this has to start with the highest office in the country. This must be a multi-sectoral response that involves provincial, district and local AIDS Councils, in order to ensure that it reaches the most rural areas. We say that by the end of 2011 every South African should know their HIV status!

    As a matter of urgency, treatment guidelines must be finalised and distributed to all districts to prepare them for scaling up their treatment and prevention programmes.

    HIV prevalence and incidence remains unacceptably high in South Africa. We are only left with a year to meet the goals of the NSP, which includes reducing new infections by 50 percent and providing appropriate treatment, care and support to 80 percent of HIV positive people by 2011.

    The role of civil society in monitoring, advocating for and promoting health system reform has not diminished – and TAC will continue to be instrumental in strengthening the voice of civil society in this regard.

    -  This article was first published in the Treatment Action Campaign’s Electronic Newsletter, 19 February 2010 and it is republished here with the permission from the TAC, a NGO working to ensure that every person living with HIV has access to quality comprehensive prevention and treatment services to live a healthy life.
  • A Sustainable HIV Treatment Programme Requires A Competitive ARV Tender

    Press Release

    22 February 2010

    Second report and resolutions of the Budget and Expenditure Monitoring Forum

    The Budget and Expenditure Monitoring Forum (BEMF), which draws together individuals and organisations from civil society, academia, government, organised labour and business, focuses attention on ensuring that sufficient money is budgeted for and appropriately spent on meeting the treatment and prevention targets of the national HIV & AIDS and STI Strategic Plan for South Africa 2007-2011 (NSP) as well as for health more broadly. BEMF held its first meeting on 21 August 2009.

    BEMF’s second meeting, which was held in Johannesburg on 5 February 2010, drew together over 40 people from 19 organisations, including legal experts, clinicians, economists, government officials, epidemiologists and trade union and civil society activists. The agenda focused on the upcoming antiretroviral (ARV) drug tender and the need to ensure that it is structured and run in a manner that enables the state to procure an adequate supply of appropriate medicines at the lowest possible prices.

    In particular, the meeting recognised that key to the success of the ARV treatment programme is the need to ensure that –
    • Government is able to procure sufficient quantities of medicines to meet demand
    • Adequate funds have been budgeted
    • Medicines are purchased at globally competitive prices; and
    • All essential products – including appropriate paediatric formulations and fixed-dose combination pills (FDCs) – are available for procurement and use in South Africa.
    For this to happen the national Department of Health (DoH) and the National Treasury must co-operate better than in the past and use the leverage they have as the world’s largest ARV treatment programme, to get the best possible deals from drug companies. Insofar as the special conditions of tender are concerned, the National Treasury must take its direction from the DoH in ensuring that the particular needs of the public sector programme are appropriately addressed.

    The meeting addressed several topics. Key discussion points are summarised here.

    2010 ARV tender

    The current ARV tender expires at the end of May 2010. Participants at the meeting were informed that the DoH, with the assistance of the Clinton Foundation Health Access Initiative (CHAI), has designed a tender process that appropriately addresses numerous issues, including the following:
    • Enabling the state to purchase ARV medicines at globally competitive prices
    • Ensuring sufficient flexibility to allow companies to submit tender bids in respect of medicines that have yet to be registered for use in South Africa but in respect of which applications for registration have already been made to the Medicines Control Council (MCC)
    • Requiring companies to reduce prices in response to certain market shifts (such as significant drops in the prices of active pharmaceutical ingredients) so as to ensure that South Africa benefits from global price reductions.
    The meeting was informed that draft tender documents incorporating the above flexibilities as special conditions have been submitted to the National Treasury for approval by the DoH. Importantly, it also heard that in terms of the relevant legislative framework, the DoH has the legal authority and sufficient regulatory space to determine its own special conditions of tender and the details of the process in terms of which medicine tenders are conducted.

    The meeting called on the National Treasury to respond quickly and positively to the DoH’s proposals, or at least to provide detailed reasons should it reject any proposal.

    ARV treatment guidelines

    Despite significant advances in ARV treatment, the 2004 treatment guidelines have yet to be revised. The meeting was informed of a process involving the South African National AIDS Council (SANAC) and the DoH to revise the guidelines. In calling for the most recent draft of the revised guidelines to be finalised and urgently published, the meeting recognised the need for future revisions to be guided by a transparent and well-defined process. In particular, the guidelines should be reviewed regularly to keep pace with advances in medical science. In addition, the process needs to take greater cognisance of the informed views of expert clinicians and people living with HIV.

    Role of the MCC

    For many reasons, the MCC has been notoriously slow and inefficient in registering medicines. Despite it having taken positive steps to address its backlog, too few ARV medicines have been registered in the past six months. This restricts the ability of the DoH to procure appropriate formulations of ARV medicines at competitive prices. In this regard, the meeting noted the need for the MCC to be allocated the necessary resources to carry out its work efficiently and effectively. In addition, it called for the MCC’s staff – all employees of the DoH – to prioritise the registration of those ARV products the state seeks to procure.

    Availability of generic medicines

    While generic versions of many ARV medicines are currently available for use in South Africa, a number of barriers still stand in the way of key products coming to market. Key products that ought to be available in South Africa include the following:
    • Cheaper generic versions of the second-line ARV drug lopinavir/ritonavir (the only protease inhibitor included in the treatment guidelines)
    • Appropriate formulations of paediatric abacavir, which are still awaiting registration by the MCC
    • FDCs covering both first and second line ARV regimens in the new guidelines. Specifically, FDCs containing tenofovir disoproxil fumarate (TDF), lamivudine (3TC) or emtricitabine (FTC), and efavirenz (EFV), including the once-daily generic FDC manufactured by the Indian company Matrix Laboratories.
    If and when registered, generic lopinavir/ritonavir products will remain unavailable in South Africa for as long as Abbott Laboratories – the patent holder – refuses to license generics companies to bring their drugs to market.

    The meeting was informed that the Minister of Health is empowered by the Patents Act to compel Abbott to issue such licences on reasonable terms and recommended that he use this statutory power.

    While a number of companies intend to bring generic TDF/3TC/EFV and TDF/FTC/EFV products to market, an exclusive supply and distribution agreement between Matrix and Aspen Pharmacare appears to prevent Matrix from bringing its versions – both of which have already been approved by the US Food & Drug Administration – to market in South Africa.

    The meeting called on Aspen to clarify the terms and conditions of its agreement with Matrix and take all reasonable steps to ensure Aspen or Matrix brings these products to market in South Africa and submits both products for the ARV tender.

    Monitoring and evaluation of the treatment and prevention programmes

    The DoH has yet to implement an effective monitoring and evaluation system of its HIV treatment and preventions programmes. If and when done, this will enable it to report – with reasonable accuracy – on the following:
    • Number of people initiated on ARV treatment;
    • Number of people currently on treatment, including the number on second-line regimens;
    • Baseline CD4 counts;
    • The number of pregnant women at the various stages of the prevention of mother-to-child transmission of HIV (PMTCT) programme; and
    • Number of infants tested and HIV prevalence amongst infants tested
    The meeting heard how this data should be broken down per district per quarter. In particular, it noted the importance of accurate data on what is happening in the treatment and prevention programmes to enable the development of accurate budgets and ensure appropriate forecasting to underpin procurement.

    Occupational Specific Dispensation and financial management crises

    The meeting was informed that the Eastern Cape Health Department does not have the funds to pay the Occupational Specific Dispensation (OSD) to eligible health care workers. This confirms months of speculation that the OSD was not properly costed and concerns that there are insufficient funds for implementation.

    In addition, the DoH has already announced that new OSD packages for medical practitioners, pharmacists and some emergency personnel will be implemented from 1 April 2010.

    Participants noted the urgent need for a proper calculation of the cost of the OSD packages to be made, as well as the obligations of the National Treasury and provincial treasuries collectively to ensure health departments are adequately funded to implement all health worker OSDs.

    The OSD crisis emphasises the need for the public release of the Integrated Support Team (IST) reports on the financial and administrative management capacity of the DoH and provincial health departments. Commissioned by Barbara Hogan during her tenure as Minister of Health in 2008/9, the IST reports have yet to be made public. A leaked copy of the Free State report reveals startling findings about the lack of cohesion between policy and budgets, poor monitoring and evaluation, challenges to the sustainability of the ARV treatment programme and a host of other financial management problems. It is available at

    The meeting recognised the need of civil society organisations to gain access to the IST reports – not only in the interests of open and transparent governance, but also to place such organisations in a better position to assist the state to implement a better health service. The meeting thus called on Minister Aaron Motsoaledi to release these reports publicly.

    Role of Parliament in the budgeting process

    The Money Bills Amendment Procedure and Related Matters Act 9 of 2009, which was assented to by former President Motlanthe and came into effect on 14 April 2009, gives Parliament wider powers over the budget process and outcome. No longer is Parliament confined to being able only to vote for or against the Budget. It now has the authority and statutory obligation, amongst other things, to consider the fiscal framework, the Division of Revenue Bill and the Appropriations Bill, and to make amendments were deemed appropriate and hold public hearings on all three.

    The meeting noted, however, that Act 9 of 2009 has yet to be properly implemented. In this regard, participants called for its full implementation and committed to support Parliament in this regard.

    The Free State AIDS Coalition briefed participants on ongoing concerns relating to ARV treatment access in that province. While the first BEMF meeting had been informed of shortages of ARV medicines in Free State health facilities, this second meeting heard about facilities that have adequate stocks of ARV medicines but are short-stocked on a range of other essential drugs.

    The meeting therefore called on the DoH to intervene in the affairs of the Free State Health Department in the manner contemplated by the Constitution.

    Drug stockouts

    The meeting also heard that the AIDS Law Project (ALP) and Health-e News Service have established a database to record incidents of drug shortages and other problems pertaining to the HIV treatment and prevention programmes. Any similar incidents should be reported to the ALP’s Agnieszka Wlodarski on 011 356 4100 or

    Meeting presentations and documents

    Four formal presentations were made at the meeting. These are available at
    • Nathan Geffen of the ALP described challenges to optimising the ARV treatment rollout Francois Venter, President of the Southern African HIV Clinicians Society, explained the new draft ARV treatment guidelines, including their advantages and shortcomings.
    • Jonathan Berger of the ALP explained the legislative framework for public procurement, with particular reference to the 2010 ARV tender.
    • Vishal Brijlal of the Clinton Health Access Initiative, who is advising the DoH on the 2010 ARV tender, explained the proposed tender process.
    Date published: 
    Budget and Expenditure Monitoring Forum
  • UNDP Donates US$25m for Good Governance

    The United Nations Development Programme (UNDP) has pledged US$25 million towards strengthening credible national institutions like parliaments, human rights organisations and anti-corruption commissions in developing countries, during 2010.

    Some US$13 million of this amount will be spent on supporting election processes in Sub-Saharan countries during 2010-2011.

    The funds will also go toward promoting inclusive governance programmes such as access to information and channels that allow stakeholder voices to be heard in governance processes.

    To read the article titled, “UNPD Allocates US$25 Million to capable and inclusive states,” click here.
    All Africa
  • Southern African Catholic Bishops’ Conference Comments on the 2010/11 Budget

    The budget tabled today by Finance Minister Pravin Gordhan was in all likelihood the last that will come in at under R1 trillion. The government will spend R907 billion in the coming financial year, due to the rise in inflation by plus 2 percent in each of the coming three years. We have come a long way, at least in expenditure terms – the 1996/7 budget was R157 billion, and ten years ago, in 2000/1, it was (only) R245 billion.

    Minister Gordhan spoke of a ‘new growth path’, the key aims of which would be to create jobs, reduce poverty, and promote economic growth; these constitute as it were a trinity of goals, each expressing in its own way a central thrust, the securing of a better life for all. This ‘new growth path’ also echoed something the Minister said early on in his speech: we must do things differently; we can’t carry on doing the same things and expect different (read: better) results.

    There are seven facets to the new growth path. Reducing joblessness among young people; supporting labour intensive industries; raising the levels of domestic savings (thus reducing what has to be borrowed from abroad); improving the State’s performance, especially in education; reforming the labour market; keeping inflation low; and improving competitiveness and skills in the workplace.

    All of these are worthy, of course, but just as the President’s State of the Nation address was widely criticised for being long on promises but short on detail, so it might be said of the budget speech that it lacked specificity. On the other hand, the Minister can at least point to the fact that his speech is but the merest synopsis of a great pile of documentation tabled simultaneously; and that anyone who wishes to examine the details will find them set out in the estimates of state expenditure.

    Among the specific points that the Minister did deal with, perhaps the most interesting was the announcement of a scheme to promote the hiring of unemployed and unskilled youth by means of a subsidy to employers. This is in itself a welcome development, a public-private partnership of the kind often talked about but seldom concretised. But it also signalled a departure, a new way of doing things. In his long tenure as Finance Minister, Trevor Manuel was never keen on using tax incentives, apparently because of the potential for abuses. However, the youth employment subsidy is to operate through the tax system, which amounts in simple terms to an incentive. If it works it will hopefully not be the last.

    There had been much speculation that the Minister would say something about a loosening of the inflation target band of 3-6 percent but, on the contrary, he was especially firm in his statement that the band would remain as is, and that the Reserve Bank would continue with a monetary policy aimed first and foremost at keeping inflation down. While this will win him no friends on the left (or among exporters) he did give an implicit nod to the concerns of the Congress of South African Trade Unions (COSATU) and others that the Reserve Bank is too much of a free agent. Gordhan referred more than once to the fact that he and the Bank’s governor would ‘consult regularly’; and he made a point of saying that the Bank needed to improve the way it communicated its policies and decisions to the public.

    Very few people will complain about the lack of tax breaks for higher income earners; the R6.5 billion in income tax relief is correctly destined for lower earners. But all taxpayers should note the Minister’s candid reference to the possibility that taxes might have to be raised in coming years. What we are forced to borrow now will have to be paid back sooner or later; and if the tax base fails to expand, existing taxpayers will ultimately have to cough up.

    The introduction of a carbon tax on all new vehicles that emit more than 120 grams of carbon per kilometre is another innovative measure, and one which will be regarded as overdue by many. It will hopefully contribute to greater environmental responsibility, and may be the first of many such taxes: the Minister clearly stated that environmental taxes would be ‘explored’.

    The fact that it was not necessary to raise taxes in this budget despite the appalling economic conditions of the last financial year, and that our borrowing requirements remain low by international standards, is a tribute to the prudent, indeed conservative, management of revenue and expenditure by the government for the last 15 years. In this respect Minister Gordhan has stepped smoothly into the shoes of his much-admired predecessor; for all his talk of doing things differently, it appears that not much will change in the overall approach to the budget.

    It remains necessary, though, to raise questions; the Minister himself would be the first to accept accountability, as was shown by his clear statement that everything the government takes in as revenue comes ultimately from the tax payer. And the essential question must be: is the money really reaching the places and people that need it most? The ongoing service delivery protests are an indication that the answer to that question is uncertain, at least as far as the poor are concerned. Here is another: the growth in total expenditure from R245 billion in 2000/1 to R907 billion in 2010/11 amounts to some 370% - close to quadrupling. Over the same period, though, the old-age pension merely doubled, from R540 per month to today’s announcement of R1 080.

    Mike Pothier
    Research Coordinator
    Southern African Catholic Bishop’s Conference
    Mike Pothier
  • The State of the Nations Address

    President Jacob Zuma has presented the State of the Nation Address to Parliament on 11 February 2010 in Cape Town.

    To read Zuma’s State of the Nation Address, click here.
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