Nene slammed for raising personal tax
Some opposition MPs say the finance minister should rather have raised vat and cut government expenditure.
CAPE TOWN - Some opposition Members of Parliament (MPs) say Finance Minister Nhlanhla Nene could have avoided raising personal income taxes and the fact that he had to hike taxes is proof government can't balance its books.
While on the other hand, the Economic Freedom Fighters (EFF) has criticised government for not increasing company tax.
Nene also announced that the general fuel levy, the electricity levy and excise duties will go up.
The Democratic Alliance believes tax increases could have been avoided if the minister had cut wasteful expenditure.
Freedom Front Plus leader, Pieter Mulder, has lamented government's decision to raise personal income tax.
"If they then must raise taxes, surely I would have gone for vat because a one percent on vat could have brought in R20 billion, solving our problem. Now you target a very small group of people, you are milking the cow until there is nothing left."
The African Christian Democratic Party's Steve Swart says government should cut the cost of corruption.
"Rather look at corrupt and wasteful expenditure of R30 billion a year."
The EFF's Julius Malema has accused the African National Congress-led government of favouring big business over the poor by choosing not to raise corporate tax.
MIXED REACTIONS OVER BUDGET SPEECH
There's been mixed reaction among economists to the minister's budget speech.
Some believe it could satisfy ratings agencies while others say it will only further drag already embattled consumers down.
But economist, Annabel Bishop, says the budget was better than she expected.
"It showed consolidation fiscal deficit and reduction expenditure growth, it will likely get positive comments from the rating agencies, certainly evidencing that we will having sustainable government finances going forward if they stick to this budget."
Investment Solutions's Chris Hart wasn't all that impressed, describing Nene's fiscal path as "anti-growth".
"South Africa needs growth to actually try and solve some of its problems and if we have low growth compounded, we going to be in a worst position this time next year compared to now." LISTEN: Bruce Whitfield speaks to Finance Minister Nhlanhla Nene about his first budget speech.
LISTEN: Bruce Whitfield speaks to Finance Minister Nhlanhla Nene about his first budget speech.
SIN TAXES UP
- A quart of beer is going up by 15,5 cents
- A bottle of wine will cost 15 cents more
- Sparkling wine lovers will fork out an extra 48 cents per bottle
- Whisky tipplers will pay R3,77 more per bottle
- Smokers will be burning up an extra 82 cents for every pack they consume.
WATCH: During his 2015 Budget Speech, Finance Minister Nhlanhla Nene announced alcohol and cigarette prices would increase.
GROWTH FOR 2015
The minister said our projected growth for 2015 was two percent, down from 2,5 percent indicated in October. He expected it to rise to three percent in 2017. LISTEN: Finance Minister Nhlanhla Nene announced a series of tax increases during his 2015 Budget Speech on 25 February.
LISTEN: Finance Minister Nhlanhla Nene announced a series of tax increases during his 2015 Budget Speech on 25 February.
He added that global economic growth is expected to remain sluggish with a 3,6 percent growth expected in the US this year. Europe however, remains weak.
"Electricity constraints hold back growth in manufacturing and mining. A consolidated deficit of 3,9 percent of GDP is projected for 2015/16 falling to 2,5 percent in 2017/18."
The budget for spending on catering, entertainment and venues is set to decline by eight percent a year, while travel and subsistence will be cut back by four percent a year.
Nene said special economic zones would be allocated R3,5 billion over the medium term, mainly for infrastructure development.
"Unemployment remains our single greatest economic and social challenge."