MTBPS: ACDP, ActionSA bemoan low economic growth, illicit trade respectively

The African Christian Democratic Party (ACDP) said while it believes the Government of National Unity (GNU) is starting to steer the fiscal ship in the right direction, low economic growth remains concerning.

Economic growth has declined from 1.9% at the start of the year to 1.2% at present.

The party - which is not part of the coalition – said it also supports the lowering of the inflation target that Finance Minister Enoch Godongwana announced when he tabled the Medium-Term Budget Policy (MTBPS) statement on Wednesday.

ACDP member of Parliament (MP) Chief Whip Steve Swart said the debt to GDP ratio remains unsatisfactory.

“The debt service costs are becoming unsustainable. So, when you have an inflation target you start saving money in the long term, but the short term can be painful. But we are, obviously also looking at the whole issue of the reduction in expenditure and we believe looking at the ghost workers, the duplicate programmes is very important. There’s so many government programmes that are producing nothing.”

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While political parties have largely welcomed greater than expected tax revenue of R19.7 billion, ActionSA said this figure could be much higher if the screws are tightened on the illicit trade.

Touching on illicit trade, Godongwana it is threatening the economy, adding that billions of rand in taxes is going uncollected.

According to the South African Revenue Service (SARS), the government has lost an estimated R40 billion in excise revenue to the cigarette black market since 2020.

ActionSA’s parliamentary leader, Athol Trollip, said there’s room for much improvement.

“We could do so much better with revenue collection, not collecting more tax from the man in the street that earns a salary, and there are very few of us. It’s been about closing the illicit economy. I was very pleased to hear the minister talking about the illicit economy, but talk is cheap, money buys the whisky. Unless we fund SAPS [South African Police Service], SARS and the Border Management Authority, we are not going to clamp down on the illicit economy.”