trevor under fire

Robert Laing

Robert Laing

Finance Minister Trevor Manuel was yesterday criticised for not fighting the "war on poverty" and "war on sin" at a post-budget business breakfast and later by Parliament's finance committee members.

His critics on the left argued that cutting the corporate tax rate along with avoiding a deficit was foolish, considering the needs of the poor.

From the right, he came under fire for widening the social assistance net by raising the child support age while dropping the retirement age for men. Only five million tax payers support 12million welfare beneficiaries as it is.

The left called the coming year's social welfare increase "peanuts", while the right saw it as unaffordably high.

"You have to have a balanced view," Manuel said. "And I think this budget strikes a good balance."

Called on to defend his decision to only raise taxes on cigarettes and alcohol in line with inflation, Manuel joked: "My title of minister is very nice. But there are other people with the title minister who are better at fighting the war on sin.

"Some people like to preach to sinners, I prefer to tax them."

Manuel explained that the practical reason he was against hiking sin taxes was to keep prices below the "smuggling index" - the point where the rewards of selling smuggled goods outweigh the risk of getting caught.

According to Manuel, the key problems in South Africa's education and health systems are not lack of money but poor management.

"Our schools and our hospitals need to be managed by people willing to be accountable to local communities. Pretoria can set new syllabuses all it likes. Without proper management at the schools, they won't get executed."

The R10billion over three years budgeted for land distribution was seen as inadequate by Manuel's critics. But his view is that throwing money at this problem will simply see desert land being sold as farms at sky high prices.

"Government is not a bank. It's not our money, we are custodians of other people's hard-earned money."

Eskom is going to find dealing with The Treasury tougher than dealing with a bank, Manuel promised the finance committee.