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The few surprises in SONA 2013

New probe into SA tax policies; NHI to be launched in 2014.

The Treasury will initiate a study of SA’s current tax policies later this year to make sure that the state has an appropriate revenue base to support public spending.

This was one of the few surprises in President Jacob Zuma’s State of the Nation address.

Zuma said SA needs “suitable tax policies to generate sufficient revenue to pay for these (public) services”. He added that the study will also evaluate the current mining royalties regime and its ability to suitably serve the people of South Africa.

Zuma also announced that the controversial National Health Insurance fund would be implemented from next year, and that the pilot programs will be accelerated from April this year.

Overall, the address did not contain any fireworks and was pale in comparison with his address last year when he announced the government’s massive R3trn infrastructure programme.

Other highlights include:

Zuma announced a new ICT target to achieve 100% broadband internet penetration by 2020.

BEE, small business
The revised Broad-based Black Economic Empowerment Act and codes are being finalised.  The development of black-owned enterprises and black industrialists will be prioritised.

Zuma reiterated government’s target to pay small and medium-sized business within 30 days, and that accounting offices that fail to execute this directive, should face consequences. He did not elaborate.

Job fund
Although much anticipated, Zuma did not provide much details of the jobs fund he announced in 2010. At the time, the fund was severely criticised by Cosatu. Zuma did however state that the Nedlac constituencies have reached agreement about the fund and that an accord will be signed later this month.

Zuma acknowledged that the mining sector has faced “difficulties” in recent months. He stressed that this has led to discussions between the mines, government and labour and that there has been agreements reached to strengthen wage and social issues within the mining communities.

He also announced that specific plans will be announced for Rustenburg, Lephalale, Emalahleni, West Rand, Welkom, Klerksdorp, Burgersfort/Steelport, Carletonville and Madibeng.

Zuma also said he met with Anglo American chairman John Parker to discuss the reported plans to restructure and retrench 14 000 workers at Anglo American Platinum. He did not elaborate on what was said at this meeting.

Land reform

Zuma also echoed the Mangaung mandate that government will drop the willing-buyer, willing seller principle to accelerate land reform and restitution, and adopt the just and equitable principle. He did not offer any detail.

Despite some jeering, Zuma also reconfirmed the government’s war against corruption.

He said the capacity of the Special Investigating Unit has grown from initial 70 staff members to more than 600 at present. “I have since 2009, signed 34 proclamations directing the SIU to investigate allegations of corruption, fraud or maladministration in various government departments and state entities.”

Zuma also urged the private sector to join the fight against corruption “so that we tackle it from all angles”.

He also stated that the government would fill all senior posts in the criminal justice system.

This may be a reference that he may fill the vacant position of head of the corruption-busting Special Investigating Unit (SIU), which has been vacant for more than a year.


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