The People's Budget Campaign, which brings together key organisations of civil society - COSATU, the SA Council of Churches (SACC) and the SA NGO Coalition (SANGOCO) - today releases the People's Budget 2005/2006.

The People's Budget summarises our organisations' views on the government budget. It argues that, above all, the budget must do more to address unemployment, poverty and inequality. In themselves, these ills prevent economic growth.

Sustainable development is possible only if we overcome the apartheid heritage by systematically directing government spending

• to improve the potential of poor households to earn incomes and engage with the economy, and
• to restructure the formal sector toward job-creating industries.

While we recognise that government has made substantial efforts to achieve these aims, much more needs to be done. In particular, the People's Budget 2005/2006 argues that greater government spending is needed

• to accelerate land reform;
• to expand housing and infrastructure for the poor in the context of sustainable communities; and
• to extend social grants by introducing a Basic Income Grant.

The People's Budget Campaign has investigated ways to fund these programmes. We welcome the relatively expansionary stance adopted by the government since 2000, when compared to its previous extremely contractionary approach. However, more rapid increases in spending are needed to overcome the backlogs left by apartheid. This can be achieved through:

• A modest increase in taxes relative to GDP, with the burden falling primarily on the rich through both increased income tax and higher VAT on luxuries;
• A small increase also in government borrowing relative to the GDP, and stronger efforts to ringfence and renegotiate apartheid debt;
• A decision not to take up the third tranche of fighter jets in the 1999 arms procurement programme; and
• More efficient funding and investment of the government employees' pension fund.

Finally, the People's Budget 2005/2006 proposes ways to enhance public participation in the budget process both directly and through Parliament.

For more information, contact: Neva Makgetla (082 563 6968) or Elroy Paulus (072 3828175), COSATU; Bishop Jo Seoka (082 893 1378) or the SACC Parliamentary Office (021 423 4261); or Glenn Farred, SANGOCO (082 899 3783)

Read the People's Budget