Use the Mid Term Budget to cut VAT on food, Mr Finance Minister
19 October 2022
Note to editors: The following remarks were delivered by Dr Dion George MP during a protest at the office of the Minister of Finance, Enoch Godongwana.
Today, the DA took the fight for more affordable food for poor South Africans directly to Finance Minister Enoch Godongwana ahead of his Mid-term Budget statement next Wednesday.
On behalf of all those who are struggling to put food on the table due to the cost of food crisis, we protested at the Finance Ministry to deliver our memorandum, demanding the following interventions that would bring much-needed relief from hunger:
Drop VAT on more food items commonly purchased by the poorest 50% of households, such as bone-in chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee, soup powder. This will help poor households to stretch food budgets further and enable the purchase of more nutritious food.
We especially call on Minister Godongwana to zero-rate bone-in chicken and other chicken categories commonly purchased by low-income households. Zero-rating bone-in chicken would cost approximately R3 billion, but experts have suggested the intervention would pay for itself through improved health, work and learning outcomes. Bone-in chicken is a high-quality source of protein and by far the most popular one for low-income households, making up 14% of low-income household food budgets. Poor South Africans need an affordable source of protein to prevent them shifting to a less nutritious high-carb diet as their budget is squeezed. It is also versatile and quick to cook, saving on energy costs.
Cut import tariffs on pasta and those chicken categories purchased by very poor households, such as chicken carcasses. This will bring meaningful relief to the poorest households while having a negligible impact on the fiscus.
Cut fuel taxes to lower the cost of transport. Fuel tax cuts will mean more money for household food budgets AND lower food costs because the high cost of transporting food has pushed up food prices at the till. Fuel tax cuts can be covered by cutting corruption and wasteful expenditure, reallocating funds such as the VIP Protection budget, and opening the economy for growth.
Reallocate the R50 million food aid for Cuba to feed hungry people at home. It is incomprehensible that the South African government would take R50 million belonging to the people of South Africa and use it to provide food aid for Cuba when people here at home are starving. And more likely, the money will go not to poor Cubans, but to the ANC’s mates in the Cuban government who will pay kickbacks in one form or another to the ANC elite.
The DA presented these proposals to President Ramaphosa and Finance Minister Godongwana five weeks ago. Today we marched to the Finance Ministry to demand that they are put through in the MTBPS next week.
While ministers are feasting, South Africans are starving.
Last month, a new survey conducted by Debt Relief showed that 81% of households are skipping at least one daily meal while 41% say they can’t feed their families anymore. This hunger crisis is harming our society in many terrible ways. At least 27% of South Africa’s children below the age of 5 are stunted due to malnutrition. Millions of schoolchildren are unable to concentrate and learn. Worker productivity is impacted, and our society is increasingly unstable.
Meantime, parliamentary questions have revealed that ministers spend millions of taxpayer rands on catering each year. And the Auditor General continues to expose billions of taxpayer rands lost to irregular, fruitless and wasteful expenditure.
And R8 million taxpayer rands are spent to protect each “VIP” politician.
Minister Godongwana could easily afford these hunger relief measures if he puts the brakes on ministerial wastefulness and puts the accelerator on economic reform to grow our economy for jobs, growth and revenue.
In addition to these four interventions, the DA continues to call for economic reforms that open the economy. Millions of jobs will be created in South Africa if we make it a place that attracts investment and scarce skills, a place where small businesses can easily start and grow. Getting people back on their feet by getting them into jobs is the best way to build resilience against hunger.
Don’t ignore South Africa’s hunger
Seven days to go. The clock is ticking. Don’t ignore South Africa’s hunger. Come to parliament next Wednesday and do the right thing, Mr Godongwana!
Issued by Dion George, DA Shadow Minister of Finance, 19 October 2022
