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In my utopia, human solidarity would not
be seen as a fact to be recognized by clearing away prejudice or
burrowing down to previously hidden depths but, rather, as a goal to be
achieved. It is to be achieved not by inquiry but by imagination, the
imaginative ability to see strange people as fellow sufferers.
Solidarity is not discovered by reflection but created. It is created by
increasing our sensitivity to the particular details of the pain and
humiliation of other, unfamiliar sorts of people.
Richard Rorty (1989), Contingency, Irony
and Solidarity.
Introduction - creating solidarity
The Budget we present today seeks to embody a philosophy that lies deep
in the struggle that has brought us together in this democratic
Assembly.
It is a philosophy of people affirming
the things that they share with others above those that set them apart…
…relying not on abstract concepts and
ideas to build our community, but seeking to anchor it to daily
solidarities, expressed in deeds and actions, of which this Budget is
only one, but a particularly visible, example.
…Solidarity that does not appear out of
thin air, but is nurtured and sustained through “the imaginative
ability to see strange people as fellow sufferers,” and it in turn
nurtures and sustains us.
…Solidarity that saw us through the
centuries of oppression, instilled in us that imaginative capacity to
identify with the suffering in our midst.
That was already part of us when we
stepped back from the precipice – oppressor and oppressed – and
began the long journey toward a better life for all.
This is the solidarity of which I speak.
This is our legacy.
We know that the society to which we
aspire – compassionate, democratic, egalitarian – will not come
about by belief alone. It is a society we seek to create.
We create it in our communities when a
person who has never had running water opens a tap in her own back yard,
when a family turns on an electric light for the first time.
We create it in our region when we join
in a compact with others, seeking to negotiate a new partnership for the
sustainable development of the continent.
We seek its global embodiment in an
international order committed to the eradication of poverty, not because
poverty is the presumed seed-bed of terrorism, but because we are all
enriched by affirming the dignity and recognizing the potential of
others.
As we table the 2002 Budget before this
House today it is therefore appropriate that we take some time to
reflect on the developments in the global economy. The past two decades
were characterized by unbridled optimism fuelled by the longest period
of growth in the United States, the prospects of economic power embodied
in the coming of age of the European Union, and the mirage of unimpeded
expansion in Asia and Latin America.
A naïve confidence prevailed that
prosperity was the guaranteed outcome of the ‘third wave of globalization’.
This wave of globalization, which began around 1980 had at its heart
three broad characteristics. First, a large group of developing
countries accounting for some three billion people became players in
global markets. Second, international migration and capital movements
increased dramatically reshaping trading patterns and ownership
structures. Third, for some developing countries, many of them in
Africa, globalization has meant increased marginalisation.
Unprecedented prosperity and wealth in
the developed nations of the world has created opportunities for growth
and trade for other countries. However, these benefits have not been
distributed equally. The bulk of capital flows remain between the rich
countries of the world. Foreign direct investment per capita in the
United States is around $3200 while in Africa it is a paltry $124. And a
naïve definition of success has blunted the world’s commitment to
address poverty. It ignored local realities, cultures, and needs. It
sought simplistic solutions to complex problems. In the aftermath of
September 11, 2001, we again face the risk of easy diagnoses. Of course
terrorism is an evil that must be countered. But this must not be
allowed to become another burden laid indiscriminately on the shoulders
of the poor. And we must not allow the war on poverty to become hostage
to another agenda.
We who are born at the cradle of humanity
have a responsibility for remaining activists for a more compassionate
society. A society that recognizes and respects the richness of our
different cultures and languages, the humanity of all the world’s
people. A society that is intolerant of poverty. A society that recognizes
the life of a Mozambican child is as precious as that of an American
child. A society that accepts that poverty anywhere lessens the humanity
of every citizen of the globe. A global society that actively seeks
human solidarity.
Solidarity is not discovered by
reflection but created. It is created by increasing our sensitivity to
the particular details of the pain and humiliation of other, unfamiliar
sorts of people.
From the global economic perspective the
challenge we face now is to ensure that the gains that have been made
through this wave of globalization can be extended to eliminate poverty
and improve equity in the poorest parts of the world. Economist Joe
Stiglitz reminds us that ‘each of the most successful globalizing
countries determined its own pace of change; each made sure that as it
grew the benefits were shared equitably.’
And so in this Budget we are able, once
again, to harvest the sweet fruits of the progress we have made. The
2002 Budget:
Gives priority to reducing poverty and
vulnerability through sustained economic growth
Increases spending on social grants, municipal infrastructure and
housing, improved police and justice services and critical
administrative services to citizens
Supports an enhanced program to address the impact of HIV/Aids
Gives continued emphasis to infrastructure investment and support and
urban and rural development
Strengthens the fight against crime
Steps up assistance to communities to improve access to affordable basic
services
Gives generous tax relief to all.
Madam Speaker, we recognize the importance of taking charge of our
destiny and of finding solutions that are appropriate for our needs and
circumstances.
Our response has been to seek a
partnership with the global economy and, in particular, the wealthy
nations of the world and the multilateral institutions. A partnership
built on trust, respect and, above all, a commitment to succeed. A
partnership designed to improve the quality of the lives of all the
people of our continent, and in particular the poor. But it is also a
partnership that will contribute positively to global growth and
prosperity. We take pride in the role that our President has played in
shaping the New Partnership for Africa’s Development. As South
Africans we have a shared responsibility to ensure that this partnership
takes root and grows.
Madam Speaker, it is our intention to
place firmly on the agenda of the global discourse the values and
principles that have guided our young democracy. The World Summit on
Sustainable Development to be held in Johannesburg in August this year
provides an opportunity to arrive at a global partnership that will
embody these values.
The Johannesburg conference is preceded
by a conference on Financing for Development in Monterrey, Mexico,
where, as one of two special envoys of the Secretary General of the
United Nations, I will have the task of challenging my colleagues, the
Ministers of Finance of developed countries, to commit to a meaningful
compact on the resources required for sustainable development. Another
important opportunity arises from the fact that as of November 2001
South Africa occupies the Chair of the Development Committee, which is
the policy making committee that governs the World Bank. It is our
intention to use this opportunity to focus the attention of the
multilateral institutions on a program of action designed to eliminate
poverty.
South Africa’s appointment as the Chair
of the Council of the World Customs Organization in June 2001 reflects
the integration of our economy into the world economy and establishes
the South African Revenue Service (SARS) as a reliable partner in trade
administration. And it also provides another forum within which to
advance the interests of developing economies and the goals of NEPAD.
Economic outlook
Economist and philosopher Amartya Sen has for many years articulated a
profound and nuanced understanding of the need to address broader social
policy concerns alongside growth as an economic goal. Public action in
areas such as education, health, social development, security, land
reform and housing are critical to a development strategy that places at
its core the need to eradicate poverty and create a better life for all
citizens.
Our economic policy over the past seven
years has been shaped by this commitment. The choices we have made are
designed to ensure that our economy grows sustainably and that more and
more of our people share in the benefits of that growth.
The Budget we table before this House
today makes five key interventions in support of development and the war
against poverty. First, this Budget is strongly oriented towards growth,
providing for an average increase in real spending of over 4 per cent a
year for the next three years. Second, it provides for an
intensification of spending on alleviating poverty, including increases
in old-age pensions and child support grants and an enhanced response to
HIV/Aids. Third, there is increased investment in infrastructure,
particularly in support of urban renewal and rural development. Fourth,
it strengthens the fight against crime by, amongst other things, making
available the resources to employ an additional 16 000 police men and
women. Fifth, it provides tax cuts for individuals, further tax
incentives for investment and a more generous tax regime for small
business.
This Budget has been crafted against the
background of considerable uncertainty about the growth prospects for
the global economy. The rapid growth that characterized the latter part
of the 1990’s stalled in 2001. The US economy descended into a
recession last year from which it is expected to make a mild recovery
this year. Although initially expected to be relatively immune to the
investment collapse in the US, Europe’s economic performance was
affected. Germany in particular has experienced a sharp slowdown. The
Japanese economy remains trapped in a recession from which it is
unlikely to recover in the year ahead. The outlook for the emerging
market economies also remains subdued. The collapse of Argentina and the
fragile position of Turkey are likely to remain points of vulnerability
for other emerging markets. It is worth noting that this is the first
time since the mid-1970’s that there has been such a comprehensive
slowdown in the global economy. The advanced economies are expected to
grow by 0,6 per cent this year.
Amidst this, South Africa’s economy has
shown impressive resilience. It is easily forgotten that the average
rate of growth in real Gross Domestic Product (GDP) between 1994 and
2000 was 2,7 per cent. If we exclude 1998, a year of exceptional
international turmoil due to the Asian financial crisis, average growth
was 3,1 per cent. The economy grew by 3,4 per cent in 2000 and about 2,2
per cent in 2001, underpinned by a moderate recovery of investment and a
strong export performance in the first half of last year.
But of course our economy is not immune
to international developments which have temporarily unsettled growth
and inflation trends. Growth for 2002 is expected to be 2,3 per cent,
rising to 3,3 per cent in 2003. Against the background of an unexpected
depreciation of the rand in the second half of last year, we now expect
inflation to pick up moderately this year.
But growth of our economy has been
underpinned by extensive structural reforms designed to ensure a more
dynamic and resilient economy.
Export diversification continues, both in
non-traditional manufactured goods, tourism-related trade and growth in
services exports. Manufactured exports grew from 9 to 20 per cent of GDP
between 1990 and 2000.
The balance of payments is immeasurably stronger and better able to
sustain stronger growth – the current account will register a moderate
deficit of 0,5 per cent of GDP in 2002.
Real wages and productivity have increased by over 20 per cent since
1994, bringing rising living standards to millions of people and
strengthening the competitiveness of industry.
The net open forward position has been reduced from some $24 billion in
1998 to just under $3 billion in January 2002.
The budget deficit is expected to be 2,1 per cent of GDP in 2002/03
falling to 1,7 per cent in 2004/05.
Madam Speaker, numerous explanations have been advanced for the
depreciation of the rand in the fourth quarter of 2001. The underlying
health of South Africa economy is not in question. Indeed the
international rating agency Moodys provided a strong endorsement of our
economic policies by raising our credit rating to Baa2.
It is widely acknowledged that the
depreciation of the rand in the last quarter of last year was overdone.
In an attempt to better understand what occasioned the sharp decline of
the exchange rate in the last quarter of 2001, a commission has been set
up headed by Advocate Myburgh. The Commission’s preliminary report is
expected by the end of April.
Rising prices impact negatively on the
poor and most vulnerable, and so the lowering of CPIX inflation from 7,7
per cent in 2000 to 6,6 per cent last year represents a significant
advance. The Governor, Mr. Tito Mboweni, must be commended for the way
in which the South African Reserve Bank has managed monetary policy
during difficult and uncertain times.
This year, we will see a temporary rise
in inflation as the economy adjusts to last year’s depreciation, and
we now expect CPIX to average 6,9 per cent, just outside the 3 – 6 per
cent target range. However, the underlying inflation outlook is firmly
downwards, and both the Government and the Reserve Bank remain confident
that CPIX will return to the target range in 2003 and beyond.
Although the overall inflation trend
remains muted, we are aware that food prices have increased sharply. The
rise in the maize price in particular, affects the poor and the most
vulnerable. The markets for grains, meat, vegetables and related
products are unavoidably affected by seasonal factors and international
developments in commodity prices and so we should expect a greater
variation in food prices than the overall CPI.
For three of the past four years, food
prices have increased by less than other consumer goods. But it is
clearly important that we avoid an undue rise in the prices of essential
staple foods. Therefore the Departments of Trade and Industry and
Agriculture have been asked to do a thorough investigation and a report
is expected shortly. We would like once more to appeal to the players in
this sector to keep prices appropriately related to costs. It would
clearly be in no-one’s interest for the benefits of a more competitive
agricultural marketing system to be lost in the pursuit of short term
opportunistic gains.
Viewed against the rapid changes in the
global economy and the deep structural reforms we have undertaken in the
past six years, our economy’s growth performance has been remarkable.
But employment creation remains weak and efforts to accelerate
investment and training and promote small business development have not
yet turned the employment trend around.
We believe that the economy’s potential
is infinitely greater. Unleashing this potential requires that we act
together as a nation. That we embrace the spirit of Vuk’uzenzele, and
allow the needs, aspirations and interests of our country and economy to
shape our respective roles, responsibilities and responses. That we act
now, together, energetically to realize the potential of our country.
Government alone cannot take responsibility for growth and development.
It is a collective responsibility. We need, all of us, to accept that
and commit to a compact that recognizes that the power to make a
difference rests with all of us.
This Budget constitutes the commitment of
government to this compact.
Such a compact would need to address a
key element in our economic and social landscape. This element, which is
hard to define precisely or adequately quantify in economic models, is
confidence. It is the need to understand that we all have a part to play
in shaping our common destiny. In our generation vests the
responsibility to build human solidarity actively, to push back poverty,
to build a compassionate, caring society. It is our task to identify the
challenges and grasp the opportunities.
Opportunities can arise in surprising
ways. We initiated a project called ‘Tips for Trevor’. The idea is
that South Africans from all walks of life are invited to write to the
Minister with tips of what should be in the Budget. About two weeks ago
one of our very tired officials inadvertently gave a telephone number
for the Ministry which turned out to be the number of Butler’s Pizza
in Gardens. Butler’s phones started ringing, not with pizza orders but
with tips for the Minister. It took very little time to convert an
annoying situation into a business opportunity. They approached our
Communications manager and proposed that, in return for the tips they
had received, they wanted a picture with the Minister. They also very
generously donated 60 pizzas to an exhausted and hungry Treasury team.
We thank them and apologize for the mix-up.
Similarly to when we called Mr. Hannes
Rabie at his farm Nuwerus yesterday to share some of his hanepoot
harvest with you here today, he jumped at the opportunity – mahala!
And offered that we should return next year for even sweeter fruit.
This captures the spirit of South Africa’s
people.
The Budget framework
2001 Budget outcome
This Budget extends the growth-oriented fiscal stance of the 2001
Budget, providing for strong real increases in spending and significant
cuts in taxes. Although the economy did slow down last year we have
again seen strong revenue performance and sound debt management.
The projected outcome for 2001/02 is
dominated by the strong tax performance. Revenue is projected to be R15
billion higher than budgeted. Supplementary allocations raise total
expenditure by R4,3 billion.
Of the additional spending this year, R2
billion goes to provinces to pay backlogs in social security payments,
R130 million is set aside for operations in Burundi and the remainder
funds unavoidable and unforeseeable expenditure approved by Parliament
in the Adjustments Budget in November 2001.
The budget deficit in 2001/02 is expected
to be 1,4 per cent of GDP.
2002 Budget priorities
The improvement in our fiscal position means that we can substantially
increase public spending, thereby increasing the potential of all our
people to contribute to social development. Main budget expenditure will
be financed through moderate growth in revenue and a deficit of 2,1 per
cent of GDP in 2002/03, decreasing to 1,7 per cent in 2004/05.
The 2002 Budget directs more resources
towards reducing poverty and vulnerability among our people; educating
our children; training and developing skills among our youth; building
and enhancing physical infrastructure and basic municipal services and
making our communities safer places to live, work and play.
Real non-interest spending across
national and provincial government will grow by 4,1 per cent a year over
the next three years. In nominal terms, it rises from R256 billion in
2002/03 to R298 billion in 2004/05.
Prudent fiscal management has resulted in
lower interest costs thereby releasing some R10 billion of additional
resources for spending on services over the next three years. Debt
service costs are expected to fall from 4,8 per cent of GDP in 2001/02
to 4,4 per cent next year and 4,1 per cent by 2004/05. What this means
is that whereas in 1998/99 we were spending 20,2 per cent of our Budget
on interest costs, for 2002/03 this comes down to 15,7 per cent and is
expected to fall below 15 per cent by 2004/05. This is clearly a policy
choice that has started to pay dividends.
The outstanding revenue performance for
this year is largely the outcome of a sharp improvement in company tax
receipts. The robust revenue trend makes possible substantial relief to
taxpayers again in the 2002 Budget, which will in turn contribute to a
recovery in household spending and economic growth over the medium term.
The main budget provides for expenditure
of R287,9 billion in 2002/03, rising to R334,6 billion in 2004/05.
Revenue increases from R265,2 billion to R313,2 billion over the same
period.
After setting aside provision for debt
costs and the contingency reserve, the framework provides for total
allocations to national departments, provinces and assistance for local
government of R237,1 billion in 2002/03, rising to R273,1 billion in
2004/05.
Recognizing that the depreciation of the
rand will impact on inflation and public service salary adjustments in
2002, the revised framework includes a R3,3 billion contingency reserve
in 2002/03, rising to R9 billion in 2004/05. The reserve also provides
for possible unforeseeable and unavoidable expenditure in the budget
year and macroeconomic uncertainties or new priorities in the years
ahead. Supplementary funds are once again set aside for new
infrastructure spending.
The 2002 Budget framework creates an
enabling environment that allows us to respond creatively to the
challenges of social development and work in partnership with
communities to build a healthy, vibrant future for all.
Our response is balanced, yet reflects
the tough choices that we have made. It ensures that spending is
affordable and sustainable, and contributes effectively towards
achieving our broad social and economic policy objectives. These include
enhancing economic growth and job creation, deepening equity and social
development and strengthening the safety and justice sector.
Investing in growth
Recognizing the need to reinforce the growth momentum of the economy,
the 2002 Budget aims to invigorate several key policy initiatives.
As in last year’s budget, investment in
infrastructure is prioritized. In addition to national and provincial
capital spending, the investment programs of public enterprises and
public-private partnership agreements – including transport projects,
government buildings and several eco-tourism initiatives – will
contribute significantly to building productive capacity in the years
ahead.
Economic performance is also enhanced by
a cluster of measures focused on enhancing the quality of public
expenditure. These include the overhaul of the shape and organization of
the public finances and a robust new framework for financial
accountability across all three spheres of government. Managerial
capacity building programs have been strengthened, information systems
upgraded and financial management training enhanced.
The most important contribution
Government makes to long-run growth and development is investing in
people. The Human Resource Development Strategy launched in April 2001
sets the framework for developing our country’s skills base. Reshaping
our universities and technikons, improving learning and teaching in
schools and creating new skills development programs for workers and
work-seekers are amongst the key elements of the strategy for human
development. To these we will add in the years ahead the new learnership
incentive and the programs of the Umsobomvu Fund.
Division of revenue
The 2002 framework allows for additional spending of R13,4 billion in
2002/03 rising to R17,9 billion in 2003/04 over the forward estimates
set out in the 2001 Budget.
Over the MTEF period, additional
allocations totaling R20,5 billion are proposed for provinces, mainly in
response to the rapid take-up of the child support grant and to
reinforce both human and physical capacity in the health system to
address the impact of communicable diseases such as HIV/Aids, TB and
malaria.
A further R6,8 billion is proposed in
support of local government to strengthen basic municipal service
provision to poor households, manage the impact of the municipal
demarcation processes and the institutional restructuring of service
delivery systems.
Supplementary allocations to national
departments include some R6,6 billion for the criminal justice sector to
employ additional personnel, strengthen the administration of justice,
improve court services and build additional prison accommodation.
Additional allocations are also directed towards key administrative
services, including modernizing the information systems of the
Department of Home Affairs and enhancing tax administration. The
Departments of Foreign Affairs and Defense are compensated for the
effects of the depreciation of the rand on their costs.
Given that most of our social spending is at the provincial sphere, the
biggest transfers in the Budget are to this sphere, rising from a
revised level of R121,2 billion in 2001/02 to R132,4 billion next year
and R152,4 billion in 2004/05. This represents an annual average growth
rate of 7,9 percent over the next three years.
With stable finances, improved financial
management, the strong growth in transfers to provinces will reinforce
accelerated delivery of pro-poor programs. They should enable provinces
to build and improve social and economic infrastructure: hospitals,
schools and roads. They should allow them to strengthen their capacity
to deliver better quality services by employing more doctors and nurses,
and to increase the amounts for old age pensions and the child support
grant.
The biggest increases in this budget go
to local government. These allocations rise by 18,3 per cent a year over
the MTEF period. Total allocations rise from R6,6 billion in 2001/02 to
R8,6 billion in 2002/03 and R10,9 billion in 2004/05. This reflects
government’s strong commitment towards the delivery of basic municipal
services and infrastructure to the poorest of our people. Now that our
municipalities have completed their transition, residents are dependent
on them to roll out essential infrastructure. Poor areas that fall
within the nodes identified in the rural development and urban renewal programs
are given an extra boost of funds to accelerate the pace of alleviating
poverty in the poorest areas of the country.
The municipal infrastructure program
increases from R2,2 billion this year to over R4 billion by 2004/05. The
housing subsidy allocations grow from R3,2 billion to R4,3 billion by
2004/05.
This year, around 30 municipalities will,
for the first time, be implementing three-year budgets for their 2002/03
budgets. The Municipal Finance Management Bill, currently before
Parliament, will also give legislative effect to financial management
reforms in this sphere.
National expenditure proposals
Details of national departments’ spending plans for the next three
years are again this year set out in the Estimates of National
Expenditure. Members will find a wealth of information here, some 820
pages of departmental aims and objectives, policy developments, program
expenditure estimates, service delivery outputs, indicators and targets.
You will be pleased to learn that I do not propose to list the full set
of measurable objectives by program. But I would urge Members to exploit
to the full this valuable compendium. Hidden in this volume and
departments’ published annual reports there is a remarkable record of
our development and progress:
In fighting cholera in KwaZulu-Natal, the Department of Water Affairs
and Forestry provided 100 000 people with safe water and 52 000 people
with ventilated pit latrines.
Some 20 300 land restitution cases have
been settled, returning 300 000 hectares to 44 246 households.
Social Development and Welfare
departments pay 1 942 000 old-age pensions and 706 000 disability grants
a month. There are 1,7 million children registered for child support
grants now.
Migration officials registered over 6
million visitors passing through our borders last year.
In 2001, the Department of Agriculture eradicated 40 000 hopper bands
and 9 000 swarms of locusts.
Regional joint task forces have seized 101,6 tons of dagga and recovered
2 595 stolen livestock.
The National Health Department distributed 310 million condoms last
year. There were over 429 000 admissions to our hospitals for complex
tertiary care. In our anti-malaria vector control program, over 1,1
million households were sprayed last year.
The Government Communication and Information System records that 909 679
pages are now registered on government websites.
And last year Parliament received 279 696 incoming telephone calls, of
which 37 744 were not answered.
There is more to the Budget, of course, than the statistics that track
expenditure and services. But by monitoring and reporting on progress,
and quantifying plans and targets, we hope to reinforce and empower this
House and the public in holding our Departments accountable.
Investing in people
Turning now to the expenditure proposals, we note that investing in
people is again the foremost priority in the Budget.
Education and skills development
Spending on education is 24 per cent of non-interest expenditure – the
lion’s share of the allocations.
Consolidated spending on education
(national and provincial government) rises to R59,8 billion in 2002/03.
It is estimated to increase to R68,3 billion by 2004/05.
For 2002/03 projected revenue from the
Skills Development Levy (which entails a 1 per cent tax on company
payroll) is expected to be R2,95 billion. Critical to the success of
this initiative is the partnership that is required between government
and business so as to ensure that the skills development programs being
implemented are consistent with the requirements of a particular sector.
The Umsobomvu Fund has youth development
as its focus. Since its inception, the Fund has initiated a number of
projects including the creation of pilot youth advisory centers, the
launch of Community Youth Service programs and the establishment of ‘school-to-work’
pilot projects. This year the Fund will launch new initiatives to
provide young entrepreneurs primarily in the small business sector with
business advisory support.
Social security grants and welfare
services
Spending on welfare services and social security grants forms a
significant share of provincial budgets, rising to R34,3 billion in
2004/05. The social grant system is our most effective tool in
alleviating poverty. Honourable members will be pleased to note that
with effect from this Budget, the date of annual increases to social
grants is brought forward from 1 July to 1 April, the start of the
financial year.
From April this year, we will place more
money in the hands of four million people, raising the value of old age
pensions and other social grants to R620 a month, an increase of R50.
This is good news for our people and will assist in improving the daily
life of poor families.
We will also help more families and
care-givers look after young children by raising the value of the child
support grant by R20 to R130 a month. The grant will be and extended to
a further 1,2 million children by the end of next year.
Health care
This Budget contains significant measures to strengthen the national
HIV/Aids program. In addition to an estimated R4 billion currently spent
by provincial health departments on Aids-related illnesses, funding for
prevention programs in schools and communities, hospital treatment and
community-care programs will amount to R1,0 billion next year, rising to
R1,8 billion in 2004/05. This includes a progressive roll-out of a program
to prevent mother-to-child transmission at the conclusion of the current
trials. Medication for the treatment of TB, pneumonia and other
opportunistic infections.
Conditional grants to provinces play a
significant role in funding health services. The tertiary services and
training grants are rationalized in support of a more equitable
distribution of services over time. The National Tertiary Service Grant
amounts to R3,7 billion in 2002/03, increasing to R4,2 billion in
2004/05. It will fund tertiary units in 27 hospitals, facilitating a
redistribution of health services from the Western Cape and Gauteng to
other provinces where poverty is more prevalent. The Health Professional
Training and Development grant rises from R1,3 billion in 2002/03 to
R1,4 billion by 2004/05 and provides for a phased increase in the number
of medical specialists and registrars in under-served provinces. R1,6
billion over the next three years is directed toward modernizing
hospitals, ensuring better tertiary health care, while improvements to
hospital management receive targeted funding rising from R124 million in
2002/03 to R138 million in 2004/05.
Facing the infrastructure challenge and
investing in economic development
Increased funding of physical construction is again prioritized, and
steps have been taken to improve capacity to spend. Well designed
investment in economic infrastructure and services has significant
potential to enhance growth and improve services and opportunities for
poor people.
This year the Budget:
Steps up allocations for electrification
to R950 million a year, supporting Eskom's drive to electrify rural
communities
Increases spending on roads and rail services by R1 billion, ensuring
that rehabilitation and investment raises economic activity and provides
development
Sets aside R80 million for the hosting of the World Summit on
Sustainable Development in Johannesburg later this year
Boosts spending on the Water Affairs and Forestry vote to R3,6 billion
in 2002/03 in support of investment in rural water and sanitation
infrastructure
Directs R300 million a year to the Post Office to assist further
restructuring that will facilitate rollout of infrastructure and
services to underserved areas
Allocates R741 million for restructuring of the Unemployment Insurance
Fund, ensuring that benefits are more effectively targeted and the
financial viability of the Fund is improved
Raises provision for sustainable land reform to R1,1 billion in 2004/05,
contributing to development and job creation in rural areas
Sets aside R700 million in 2002/03, rising to R2 billion in 2004/05, for
infrastructure investment in support of rural and urban development.
Provincial spending on social and economic infrastructure has improved
and municipal infrastructure financing receives substantial increases in
allocations over the next three years.
Development partnerships with local government
Development is not only about large-scale infrastructure projects,
wide-reaching income support or high profile health campaigns. For many,
‘real’ development happens when people’s access to services and
opportunities within their own communities improves. When they are able
to open the door to their own house, drink water that is clean and safe
from disease, switch on an electric light, and watch their children kick
a soccer ball around the community soccer ground. Building a better life
for all is therefore a challenge that we share with communities.
Spending plans set out in this year’s Budget encourage partnerships
with communities, building solidarity as we join hands to improve access
to affordable basic services. Increased funds are allocated to step up
housing and municipal infrastructure programs, focusing on water,
sanitation and electrification.
We are making good progress in the first
pilot projects identified under the Integrated Sustainable Rural
Development and Urban Renewal programs. In these areas, national and
provincial departments will work with councils and local organizations
to improve services, create business opportunities and build strong and
thriving communities.
Strengthening the fight against crime
Social progress also rests on effectively combating crime and making
communities safer places to live, work and play. We are resolute about
strengthening the fight against crime.
Over the next three years, an additional
R5,2 billion will go the Safety and Security vote. This allows 16 000
more police men and women to be employed to reduce crime in areas that
are identified as ‘crime hot-spots’, working in close cooperation
with communities to improve their everyday safety and security.
More police officials on the beat will
lead to more arrests. These arrests place a further burden on an already
stressed judicial system. Over the next three years a further R826
million will help efforts to restructure and streamline operations in
the administration of justice, enhancing court efficiency and raising
the overall efficacy of the criminal justice system.
Once criminals are prosecuted and found
guilty, they are sentenced to an appropriate prison term. A rapid
increase in the prisoner population has contributed to significant
overcrowding in prisons across the country. We estimate that our daily
average prisoner population will rise to 225 600 by 2004/05. Budgeted
spending on the Correctional Services vote increases from R6,9 billion
in 2002/03 to R8,1 billion in 2004/05 to fund increased operational
costs associated with higher prisoner numbers and expanding prison
capacity.
The Defense Force is involved in diverse
activities, including operations to combat crime, patrolling the country’s
borders and rural areas and fulfilling international obligations in
providing peace support in the Democratic Republic of the Congo (DRC),
Burundi, and the Horn of Africa.
Increases on the Defense vote will
provide for the higher costs of the strategic defence procurement program
due to revised exchange rate projections. Provision is also made for the
protection mission to Burundi, the costs of which will partly be
recovered from international donors. The rise in spending brings total
defence expenditure to 1,7 per cent of GDP in 2002/03, compared with 3,7
per cent a decade ago and 1,5 per cent in 1997/98.
Revenue trends and tax proposals
The past fiscal year turned in yet another buoyant revenue performance,
following comprehensive tax policy reforms and further advances in
restructuring the Revenue Service and collection processes.
In this year’s Budget, Government
continues to provide substantial tax relief for individuals and seeks to
improve further the effectiveness and efficiency of the South African
tax structure with a view to encouraging investment and reducing the
cost of doing business in South Africa.
Progress on outstanding 2001 tax reform
initiatives
As indicated in the 2001 Medium Term Budget Policy Statement, this year
heralds a period of consolidation after the far-reaching income tax
changes that have been introduced since 2000. We are able to report on
progress in several key tax reforms of last year’s budget.
We announced the introduction of a wage
incentive last year. Recognizing the importance of investing in skills
alongside the creation of jobs, it will take the form of an additional
tax allowance for learnerships offered by employers. Draft legislation
has been released for public comment and will be introduced this year.
An allowance to employers in the form of a R25 000 deduction will be
permitted when a learnership agreement is signed, and a further R25 000
when the learnership is successfully completed. This incentive program
applies to all learnerships entered into from 1 October 2001 and will
apply for a five-year period.
An amount of R3 billion of foregone tax
revenue over four years was allocated in the 2001 Budget to encourage
investment projects with significant direct and indirect benefits for
the South African manufacturing sector. The National Treasury and the
Department of Trade and Industry have developed stringent evaluation
criteria and transparent administrative processes that seek to guarantee
that only those applications that significantly raise the
competitiveness of the economy and create job opportunities are
approved. The program is characterized by sound governance and
Parliamentary oversight procedures. The Department of Trade and Industry
will begin to process applications shortly.
Last year, Government announced
fundamental measures for a more coherent tax environment for public
benefit organizations. We raised significantly the thresholds for
tax-deductible donations by individuals. In addition, the range of
deserving public benefit organizations that qualified for tax-deductible
donations was broadened, including those caring for children and the
aged, HIV/AIDS care and education. Moreover, Government released a list
of public benefit activities that qualify an organization for tax-exempt
status, thereby widening the range of qualifying organizations.
Underlying this list of tax-privileged activities is the principle that
these must promote social development or meet special needs of the wider
public, and not just a narrowly exclusive group.
The list of organizations qualifying for
tax-deductible donations and tax-exempt status will be broadened during
the course of the 2002/03 fiscal year. The National Treasury and SARS
have already met with important stakeholders to discuss revisions to the
public benefit activity lists. The new approach, together with the
enhanced capacity of SARS to administer these incentives, adds another
well-targeted set of measures in addressing poverty and vulnerability
effectively.
I am pleased to report that the revised
list will include provision of health services to the poor and care of
the terminally ill and persons with severe physical or mental
impairment. Furthermore, we propose to recognize private contributions
to our trans-frontier peace parks for tax purposes. This will encourage
initiatives that bring jobs and tourists to our region, and signal the
spirit of partnership between nations, and between government and the
private sector, that underpins Africa’s new approach to development.
Growth-enhancing income tax proposals
Personal income tax relief
The personal income tax is South Africa’s most important revenue
source, contributing nearly 37 per cent of main budget revenue in
2001/02. In the 2001 Medium Term Budget Policy we indicated that
increased revenue associated with enhanced tax collection efforts will
be returned to taxpayers through further relief to individuals,
particularly in the lower and middle-income brackets.
Taking account of the sterling revenue
performance of SARS and the tax base broadening achieved by introducing
the residence-based income tax system and capital gains tax, we propose
this year to reduce income taxes on individuals by a further R15
billion. Individual taxpayers are therefore the primary beneficiaries of
the income tax base broadening initiatives and improved collection
record. This brings personal income tax relief since 1995 to R48,6
billion.
The revised tax scales mean:
The income tax threshold is raised from
R23 000 to R27 000 – that is, people earning below R27 000 a year will
pay no income tax.
The tax threshold for taxpayers age 65 and over increases to R42 640.
Someone earning R60 000 a year will pay R1 380 less; those earning R90
000 will pay R3 480 less.
Rates and bracket adjustment provide relief across the entire income tax
population, with the maximum rate reduced from 42 per cent to 40 per
cent.
Of the total tax relief, 57 per cent accrues to taxpayers earning less
than R150 000 a year, 37 per cent accrues to taxpayers earning between
R150 000 and R300 000 a year and 6 per cent to taxpayers earning more
than R300 000 a year.
The average tax cut for taxpayers in the income group up to R150 000 is
25 per cent, for taxpayers in the income group of R150 000 to R300 000
it is 14 per cent and for taxpayers earning more than R300 000 average
rates are cut by 7 per cent.
This individual tax relief package contributes to reducing the cost of
employment and rewards work and savings. It also narrows the gap between
the maximum individual rate and the company rate, improving the
integrity and consistency of the tax structure.
Increase of interest and dividend income exemption
Complementing the income tax rate reductions, it is proposed to increase
the domestic interest and dividend income exemption from the current R4
000 to R6 000 for taxpayers under the age of 65 and from R5 000 to R10
000 for taxpayers aged 65 and over. This measure provides substantial
relief to those living on modest fixed-interest incomes. This relief
measure will cost the fiscus R163 million.
With a view to encouraging taxpayers to
make their savings available for domestic capital formation, foreign
interest and dividends will in future only be exempt up to R1 000 out of
the total exemption limit.
Accelerating depreciation allowances for
manufacturing plant
South Africa needs to nurture its economic growth and job creation. In
order to encourage investment in productive capacity, an accelerated
depreciation allowance for a broad range of new manufacturing assets
acquired within 3 years from 1 March 2002 is proposed. These assets will
be depreciated over 4 years in contrast to the existing 5-year period.
Forty per cent of the cost of the asset will be deducted in the first
year and twenty per cent of the cost for the subsequent three years.
This measure will encourage investment
and ease the impact on investing firms of the recent depreciation of the
rand.
In addition, the monetary threshold for
assets acquired on or after 1 March 2002 that may be immediately written
off is increased from R1 000 to R2 000.
These two measures will cost the fiscus
R295 million in 2002/03.
Extending tax and administrative relief
for small businesses
Government is very conscious of the needs of the small business sector
and in the unfolding tax reform program recognizes this sector’s
strategic role in economic growth and employment. Building on the 2000
and 2001 concessions, it is proposed to increase the existing threshold
of the first R100 000 of taxable income, which attracts the 15 per cent
graduated company tax rate, to R150 000.
The small business benefits are limited
to companies with an annual turnover of less than R1 million. It is
proposed to raise this threshold to R3 million, with these changes
taking effect for companies with years of assessment ending on or after
1 April 2002.
It is common knowledge that the burden of
tax and regulatory compliance impacts adversely on small businesses.
Administrative procedures and the existing penalty provisions will be
reviewed with the aim of simplifying tax compliance for small
businesses. In addition, a simplified approach to calculating VAT
obligations will be investigated. These measures combined constitute a
possible revenue loss of R40 million in 2002/03.
Review of monetary thresholds
The Income Tax Act contains a number of monetary thresholds that need to
be adjusted from time to time to take account of the effects of
inflation. Taking account of affordability and the economic impact of
the threshold, the following revisions are proposed:
Tax-exempt donations are raised to R30 000 for individuals and R10 000
for companies not considered to be public companies.
The exemption from estate duty is increased to R1,5 million.
Exemptions for bursaries and scholarships are raised.
The R1 000 threshold for medical expense deductions will be eliminated.
The exemption from tax for bravery and long service awards is raised to
R5 000.
The immediate deduction for intellectual property will be increased to
R5 000.
These proposals will result in revenue losses of R36 million.
Tax simplification & reducing cost of doing business in South Africa
Limitation of employee deductions
Recognizing that most salaried employees have few expenses that are
incurred in the production of their employment income, it is proposed to
simplify the taxation of employment income by limiting employee
deductions to the following:
Business travel deductions against car allowance
Certain medical expenses
Contributions to pension and retirement annuity funds
Donations to certain public benefit organizations
Specific expenditure against allowances of holders of public office
Wear and tear allowances on equipment.
These limitations, which will not apply where an employee’s
remuneration is wholly or mainly derived in the form of commissions
based on sales or turnover, will come into effect on 1 March 2002.
It is also proposed that the R150 a day
allowance, which compensates for deemed accommodation costs where actual
expenses are not claimed, should be abolished. Taxpayers may still be
reimbursed by employers for actual expenses incurred on accommodation
for business purposes. The R65 a day allowance for subsistence expenses
will be continued.
These steps will increase revenue by R100
million.
Other administrative reforms
Other administrative reforms are proposed, resulting in an estimated net
revenue loss of R50 million. For example, it is proposed that the
existing June year-end arrangement with certain farmers, fishers and
diamond diggers, which dates back to 1962, should be terminated. The
remaining 1 000 taxpayers on this system will be brought into the
standard provisional tax arrangement. Also, the provisional tax
registration threshold for individuals below the age of 65 who earn
taxable non-employment income will be raised from R2 000 a year to R10
000 from 1 March 2002.
On properties with a value of less than R100 000, no duty to be paid
A 5 per cent duty on the value above R100 000 up to a value of R300 000,
and
8 per cent on the value above R300 000.
The average duty on property with a value of R150 000 will fall from 3,1
per cent to 1,7 per cent, whereas the duty on property with a value of
R300 000 falls from 4,6 per cent to 3,3 per cent, thereby maintaining an
appropriate progressive property transfer tax. The new rate structure
will apply for property acquisitions from 1 March 2002 and will cost
R300 million in revenue foregone.
Reducing financial transaction taxes
There are a variety of financial transaction taxes still in place in our
tax structure. In order to contribute to the competitiveness and
development of our financial sector, it is proposed that certain of
these should be abolished.
With effect from 1 January 2002, the 2,5
per cent charge on Lloyd’s insurance premiums will be withdrawn. With
effect from 1 April, taxes on the following transactions or financial
instruments will be abolished:
Repurchase of warrants by their issuers
Issue of listed debt instruments
Transfer of a mortgage bond from one institution to another
Various insurance policies or contracts, and the cession of insurance
policies.
The overall cost to the fiscus of the transaction tax withdrawals is
R130 million.
Indirect tax proposals
Although revenue from value-added tax is expected to be moderately lower
than budgeted in 2001/02, it remains a dependable and broad-based tax
source. No change in VAT is proposed.
Duties on beverages and tobacco products
Excise taxes have also lagged behind budget estimates, reflecting both
slower than anticipated spending trends and shifts in household
consumption away from excisable products in response to higher taxes.
Bearing both revenue and health considerations in mind, the following
adjustments are proposed.
Beer and ciders are raised by 8 per cent, bringing the proposed excise
duty to 43,6 cents per 340 ml can or an average increase of 3,2 cents
per can.
Sorghum beer and sorghum flour duties will not be increased.
Duties on wine are raised by 8 per cent.
Duties on spirits and sparkling wine are increased by 10 per cent. This
translates into a total excise duty of R11.84 per 750ml bottle of
spirits, or a R1,08 increase per bottle.
Taxes on tobacco products are raised by an average of 12 per cent. This
increases the total excise tax burden to R3.51 per packet of 20
cigarettes, or an increase of 34 cents per packet.
These excise measures will raise R798 million.
Government has steadily reduced excise
duties on soft drinks over the last four years. It is proposed to
abolish the remaining 6c a liter duty. The estimated revenue loss will
amount to R135 million.
Fuel levy
Mindful of the effect of the depreciation of the rand on pump prices and
the dependence of our urban public transport system, there will be no
change in the general fuel levy on diesel and petrol this year. The tax
burden on fuel has fallen from an average of 45 per cent of the pump
price in 1998 to approximately 30 per cent in 2001.
Environmentally-friendly diesel fuels
Madam Speaker, we are advised that it is now possible to power a motor
vehicle using crushed sunflower seeds. Environmentally-friendly
biodiesel and ethanol alternatives have the potential, our advisers tell
us, to reduce our dependence on imported fossil fuels and provide a
growing market for employment-intensive oil seed crops.
To provide appropriate encouragement to
these developments, it is proposed that a levy at 70 per cent of the
general fuel levy rate should apply to the consumption of
environmentally-friendly alternative diesel fuels. Other provisions –
the Road Accident Fund levy, off-road fuel levy concessions, the SACU
excise duty and VAT zero-rating – will apply as for other fuels.
Further maritime diesel fuel concessions
It is proposed to extend the existing full diesel concession to offshore
vessels conducting research in support of the maritime industry, coastal
patrol vessels, vessel employed in servicing of fiber optic
telecommunication cables along our coastlines, harbor vessels operated
by Portnet and in-port bunker barges. An estimated revenue loss of R4,1
million to the fiscus and R2,4 million to the Road Accident Fund is
envisaged.
Road Accident Fund levy increase
The Road Accident Fund is currently re-engineering its claims processing
procedures with a view to striving towards disciplined financial
management. On the understanding that the Fund will continue to improve
its efficiency and stamp out fraud, the Road Accident Fund levy is
increased by 2 cents a liter to 18,5 c/liter to meet the Fund’s
ongoing liabilities. This will raise an additional R310 million and will
be effective from 3 April 2002.
Addressing tax avoidance and reducing the compliance gap
Madam Speaker, the overall impact of our tax proposals is to provide tax
relief of R15,2 billion. This is possible, in large measure, because of
the progress SARS continues to make in reducing what we call the “tax
gap” – the gap between the revenue that is actually collected and
the amount that would be raised if compliance with the tax code was
complete.
The gap arises for various reasons. In
some cases taxpayers are not aware of their obligations. In others, tax
is avoided by aggressive tax planning, while purportedly adhering to the
letter of the law. Then there are those who simply ignore their
obligations. An increasing number of people are finding that this is a
dangerous choice.
The tax gap is of course not only of
interest to SARS and the National Treasury. Closing the gap is what
makes tax relief and rising social spending possible. Closing the gap
allows us to lower the burden on those citizens who meet their
obligations and accelerate our investment in meeting the pressing needs
of the country.
There are several ways in which we are
steadily closing the gap.
SARS has begun the shift to an integrated
audit approach, allowing the examination and comparison of a wide
spectrum of taxes in a company’s books. This improves our service to
taxpayers while yielding valuable comparative information. By drawing on
integrated field audits and employment of highly skilled specialists,
the Woodmead project in Gauteng, for example, has exposed non-compliance
in both the formal and informal sectors of the business community.
In the banking sector, as announced last year, we have put the spotlight
on the arrangements and structures that lead to low effective tax rates.
Improved enforcement of current law has already yielded additional
collections of R792 million. A review of the taxation of derivative
instruments and financial leases will take place in the coming year.
The number of personnel in SARS’s Corporate Tax Center will double by
the middle of this year, contributing both to improved audit capacity
and better quality service to corporate business.
The role of tax advisors and consultants in ensuring better compliance
and sound advice to taxpayers is a further area for review in the year
ahead.
Initiatives to extend compliance to areas of the economy where it is
erratic or non-existent are being stepped up. As these unfold, SARS will
ensure that those who approach the Revenue Service voluntarily to meet
their obligations will be met with a helpful and sympathetic reception.
Those who don’t, will meet us in court.
Details of these and other measures to streamline tax administration and
address tax avoidance are set out in the Budget Review. Specific
proposals include:
Introduction of a deeming provision to underpin enforcement of the
taxation of foreign income
Raising the provisional tax threshold from R2 000 to R10 000
Investigation of the introduction of more frequent provisional tax
payments
Taxation of trusts other than special trusts and testamentary trusts
established for the benefit of minor children at a flat rate of 40 per
cent.
SARS’s transformation program, Siyakha, and its technology improvement
program, aim to address the inadequate and outdated systems and
technology currently in use and to provide a better quality service to
all taxpayers. The reforms will take time before they are fully
effective. In the short term, SARS will be launching a complaints office
that will operate independently of branch offices, and small businesses
will benefit from the simplification of tax forms and more accessible
contact centers. As the larger transformation gathers momentum, we will
find that our investment in improving tax compliance contributes not
just to government revenue, but also to improved accounting and
auditing, better governance and reduced financial risk in the business
community at large.
Reinforcing corporate governance
The issue of corporate governance and in particular the role of the
auditing firms has once again dominated the headlines. The Enron debacle
has brought into sharp relief a number of key issues – weak or
non-existent governance structures, the fiduciary responsibility of
directors, negligent and sometimes reckless management, ineffective
auditing, independence of auditors and conflicts of interest arising
from inadequate separation between auditing and consultancy. Closer to
home a number of corporate failures – Macmed, Leisurenet, Regal
Treasury, Unifer – to name but a few, have raised a similar set of
issues. Many of these weaknesses were highlighted in the Nel Commission’s
Report.
The Minister of Finance has
responsibility for the legislation governing the audit profession in
South Africa. Last year the National Accountancy and Consultative Forum
presented me with a draft Accountancy Professions Bill to replace the
existing Public Accounting and Auditors Act of 1991. Having considered
the draft legislation and taking account of recent developments both
nationally and globally, it is my view that the Bill does not go far
enough. Over the coming months we will actively engage with all the role
players to ensure that the Bill addresses our country’s needs in this
regard.
Financing proposals
After taking account of our spending proposals and revenue estimates,
there is a budget deficit of R22,7 billion to finance next year, or 2,1
per cent of GDP.
To date total investment of R27 billion
has been raised through restructuring state assets, mainly from
international equity partners, of which R17 billion has been used to
reduce debt. Given the accelerated pace of implementation some R12
billion from the restructuring of public enterprises is expected in
2002/03, decreasing the net borrowing requirement to R12,2 billion.
We propose to raise R4 billion in
short-term loans next year, contributing further to the liquidity of
this market. Net foreign borrowing to the value of R16,2 billion is
proposed. This will allow domestic long-term debt to be reduced by about
R11 billion – in effect, we propose to repay R11 billion in long-term
rand-denominated debt next year.
At the end of 2001/02, total net loan
debt will amount to R425,1 billion, or 42,9 per cent of GDP, down from
over 48 per cent five years ago. Debt will steadily decline as a share
of GDP to a projected 37,4 per cent by the end of 2004/05.
Conclusion
Madam Speaker, allow me to express my profound appreciation to:
President Mbeki for his leadership and the challenges he puts before us,
before this House, before our nation and before our continent.
Deputy President Zuma and my Cabinet colleagues, particularly the
members of the Ministers’ Committee on the Budget, for your support
and initiative in bringing forward budget suggestions.
Deputy Minister Mandisi ‘Sipho’ Mpahlwa for sharing the duties we
carry and for friendship.
My “Team Finance” colleagues in the Provincial Executive Councils,
who have led with courage and professionalism.
Our task has been greatly facilitated by several others: Governor Tito
Mboweni and his team at the South African Reserve Bank, Murphy Morobe
and members of the Financial and Fiscal Commission, Philip Dexter and
Nedlac, Ms Barbara Hogan and Ms Qedani Mahlangu, as Chairpersons of the
Portfolio and Select Committees of Finance, respectively.
A special word of thanks is due to the
many South Africans who took time and made the effort to write, fax and
email us their suggestions for the Budget. We have tried to accommodate
as many of these as possible. I am sorry that some ideas – such as the
abolition of Personal Income Taxes – could not be accommodated.
Apologies also to the correspondent who requested that ice-rink tickets
should be zero-rated for VAT purposes.
The Budget is largely the fruit of the
efforts of the National Treasury and the Revenue Service. Special thanks
are due to Maria Ramos and Pravin Gordhan for the leadership they have
given.
Thanks also to the staff of the Ministry
who have tolerated us with good cheer. Last but not least, to my family
for their unwavering support.
This Budget makes an important
contribution to achieving more caring, more compassionate, more
prosperous society. A society with the imagination to achieve
solidarity, freedom from poverty and human dignity. A society that
nurtures its children, that respects and cherishes its elderly. A
society that draws deeply on its history and the qualities of its
struggle – resilience, humility, courage, wisdom, tolerance,
assurance, and an indomitable spirit for life. These values are rooted
deep in the psyche of our nation. They guide us now as they guided the
great leaders of our country. And although we have achieved our liberty,
the vision that inspired that great patriot, Chief Albert Luthuli, must
continue to be what we aspire to and strive for.
The task is not finished. South Africa is
not yet a home for all her sons and daughters. Such a home we wish to
ensure. From the beginning our history has been one of ascending
unities, the breaking of tribal, racial and creedal barriers. The past
cannot hope to have a life sustained by itself, wrenched from the whole.
There remains before us the building of a new land …from the ruins of
the old narrow groups, a synthesis of the rich cultural strains which we
have inherited. ...The task is immense.
Albert Luthuli (1962), Let my People Go
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