S. African budget: largest in an election campaign
Cape Town — Opposition party spokesmen are calling the South African government's interim campaign budget announced this week a "vote-now, pay-later" budget. With a general election set for just over two months' time, the government has announced pay increases ranging from around 10 percent to more than 20 percent for all the country's public servants, including teachers, nurses, the police, and the defense force.
There are also handouts to pensioners and war veterans, and concessions to the country's fat cats: Residents traveling overseas on holiday will be allowed to take more money with them ($3,125 instead of $2,345 a year), and businessmen going on trips away from the country will be able to spend $5,860 a year instead of $3,900.
The government has also temporarily shelved a proposed tax on businessmen's "fringe benefits," and there are to be relaxations in exchange control regulations.
All the concessions benefit the country's white voters most of all -- only whites can vote in the coming election -- and there is very little direct relief for the Africans, who form the great majority of the population and who have been hardest hit by the galloping increases in the prices of basic commodities in the past year.
Opposition leaders, for example, have been urging the government to abolish the general 4 percent sales tax on basic foodstuffs to help blacks particularly, but this has not been done. And although black state pensions are to be increased, they will remain much less than the pensions paid to whites.
What is more, Finance Minister Owen Horwood has hinted that the price of some basic foodstuffs, and also transport costs for workers, may actually be increased later. Both are heavily subsidized at present, and Mr. Horwood indicated that the government is finding the subsidies expensive.
But because there would be an outcry from whites as well as blacks if the subsidies were reduced and the prices increased, there is little likelihood of this happening before the votes have been counted.
The most constructive move in the budget has been to raise the wages paid teachers of mixed race and Asian teachers to the same level as those for qualified whites.
Although the government has been talking about "reducing the wage gap" between the various races for some time, this is one of the most important concrete steps it has taken toward achieving this in the public service.
It seems part of a calculated policy to gradually draw the whites, people of mixed race, and the Asians more closely together economically and politically. But people of mixed race and Asians still suffer considerable disadvantages of all kinds because of the rigid basic policy of apartheid that still applies.
And the Africans, who form three-quarters of the population, are even further out in the cold. Qualified African teachers, typically, will continue to receive less pay than the whites, the Asians, and the Colored people.
Having dished out all the good news he can before the election, Finance Minister Horwood is not expected to take too long after polling day to administer less popular medicine.
South Africa has just had a boom year. Real growth was around 8 percent. Company reports since the year's end nearly all disclose record profit increases: Increases of 30 to 50 percent over the previous year are commonplace, and several major companies have done much better. Shareholders here and overseas are pocketing record dividends.
What is more, the kettle is not yet off the boil. Predictions are that the real growth this year will be down only relatively slightly, to between 5 and 6 percent.
But increasing inflation is worrying everybody, and the government will have to tighten the reins on the money supply and interest rates are expected to increase across the board.
How drastically the government will act will not become absolutely clear until it is safely returned to power, with five ful l years before it has to go to the polls again.