South Africa urged to end austerity measures amid "unacceptably high levels of inequality"
Following its first review of South Africa, the United Nations Committee on Economic, Social and Cultural Rights (CESCR) has called on the government to review its fiscal policies in order for the country to meet its human rights obligations and achieve greater levels of economic redistribution.
The UN Committee oversees implementation by more than 170 countries of the International Covenant on Economic, Social and Cultural Rights, which South Africa agreed to be bound by in 2015.
Citing “unacceptably high levels of economic and social inequalities” that have persisted since the end of apartheid, the Committee said that current “personal and corporate income taxes, capital gains and transaction taxes, inheritance tax, and property tax, do not enable [South Africa] to mobilize the resources required to reduce inequalities.” This is having a “serious impact on the ability of the State party to meet its obligation to mobilize the maximum available resources for the implementation of economic, social and cultural rights,” according to the Committee.
Daniel McLaren of legal public interest center SECTION27 said “In the week before the Medium Term Budget Policy Statement, this UN report sends a clear message that those on the lowest incomes cannot afford any more budget cuts. We look forward to working with the government to implement these recommendations.”
Civil society submissions lay bare the impacts of austerity, regressive taxation and corruption on the rights of South Africans
The Concluding Observations of the Committee draw on a submission and factsheet presented by civil society groups SECTION27, the Institute for Economic Justice (IEJ) and the Center for Economic and Social Rights (CESR) to the Committee on October 1st. The advocates furnished empirical data that made clear the detrimental effects austerity policies and corruption are having on economic and social rights in the country. Public spending per person is set to decline for a fourth year in row, placing under massive strain the health and education systems that the majority of people rely on. Average class sizes at the poorest public schools have increased in recent years while many health departments are unable to hire doctors or pay suppliers of medical equipment because of budget shortfalls.
During a two-day dialogue with the government delegation on October 1-2, the Committee questioned the wisdom of the government’s austerity measures and asked what measures were being taken to avoid low-income households bearing a disproportionate burden from the budget cuts. In its Concluding Observations, the Committee finds that government is not conducting such assessments and as a result, was at risk of reversing gains made since 1994, “particularly in the health and education sectors.”
Committee calls for progressive, revenue-generating tax revisions and renewed commitment to rights fulfillment
The Committee said that tax policies could be more progressive and called on the government to “intensify its efforts to combat illicit financial flows and tax avoidance with a view to raising national revenues and increasing reliance on domestic resources.” Regarding the increase of VAT from 14 to 15 percent, The Committee noted that it was “concerned about the impacts of this increase on low-income households.” It also called for a revision of the Provincial and Local Government Equitable Share Formulas to reduce regional disparities in access to rights.
Gilad Isaacs of the Institute for Economic Justice said, “Government’s revenue policies do not generate sufficient funds. Businesses and the wealthy, who have enjoyed large tax reductions, must be taxed at a higher rate. The austere debt targets must be revised and the crises plaguing the South African Revenue Service swiftly resolved. The Medium Term Budget Policy Statement should protect critical social services, not undermine them.”
Image courtesy of South African Democratic Teachers Union