Hlabisa says IFP put interests of SA first in move to support VAT hike

The IFP has defended its decision to support the budget with a VAT increase, saying those accusing the party of selling out are grandstanding.

At a media briefing in Durban on Monday, party president Velenkosini Hlabisa said the IFP’s support for a budget with a VAT increase was based on the firm belief that the country needed stability and certainty. 

“The IFP’s participation in the GNU and support for the budget is a clear expression of our unique contribution and commitment to putting the interests of the country first, ahead of our own personal interest as a party,” Hlabisa said. 

In the last couple of weeks, he had observed a “perplexing God complex” among some politicians, he said. 

“I have observed leaders, who despite the incredibly complicated difficulties SA faces, being absolutely convinced that only themselves understand how SA works. And that it is only them that have the solutions on how best to tackle all of SA’s complexities. This is simply unfortunate. This misinformation campaign on social media must be corrected.” 

The IFP had objected to the two percentage point VAT increase proposal, he said.

“The IFP’s identity in the GNU remains fully intact. We are not in the GNU to carry the ANC or the DA’s bags. Nor are we there to conform to the views of one party or another. We have our own policy agenda and our own way of doing things.”

Hlabisa said the country stood on the brink of becoming a failed state, hence it needed to be saved. The reality was that the economy had stagnated over many years and billions had been lost to disinvestment, he said.

The IFP supported the budget with a VAT increase because it did not want the country to continue to operate on debt. 

“The disastrous mismanagement of state-owned enterprises and corruption have scared off investors. We are therefore relying on a diminishing pool of resources to fund an increasing pool of need. This increasing pool of needs includes the salaries of civil servants, increasing social grants, free government services such as water and electricity, free housing and other services,” he said.

The R402bn injected into transport and logistics would enable the economy to grow and create jobs in the construction and related sectors. 

It is clear that they needed to tighten the loopholes, he said, adding that one such loophole was the R800bn not being collected by Sars. 

Hlabisa also touched on the issue of illegal immigrants. 

“It is more urgent than before that we deal with illegal migration. It is a fact that millions of illegal immigrants now within our borders are putting a heavy strain on our fiscus and this takes away from the resources meant for poor and vulnerable South Africans,” he said. 

Hlabisa said the IFP was at its core a pro-poor party.

“Therefore, we needed to see an increased safety net for the poor. We welcome the expansion of the zero-rated VAT food items alongside the increase of the social grants, as it will provide much-needed relief to the poorest households. And we do believe that there is more scope to increase the zero-rated VAT food items.”

He said the introduction of the urban development financing grant, designed to strengthen infrastructure investment in municipal entities responsible for water, sanitation, electricity, energy and solid waste management services, was also to be welcomed as it guaranteed jobs and development.

“It remains our commitment to ensure the VAT increase is a short-term intervention for long-term fiscal relief and therefore we must implement stricter oversight mechanisms within the GNU to prevent wastage and corruption, ensuring that VAT revenue is used efficiently and for the intended purposes.”  

The IFP would hold the government accountable to ensure that the VAT increase did not become a burden on citizens, he said. 

“Our people are still struggling with the high cost of food, the high cost of fuel, and basic services, so if you were to agree to any form of VAT hike without addressing the challenges our people are facing out there, that would be unjust.

“These challenges we believe were addressed by the minister of finance, thus the IFP supported the budget.”

Hlabisa did not believe the stance taken by the DA in the cabinet not to support the budget would have an effect on the government of provincial unity. 

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