Deputy Speaker, hon members, Ministers present here, particularly the Minister of Finance, on an occasion like this it is always important to remind ourselves of what the Constitution says about our history and where we intend to go.
First, let me say that our Constitution acknowledges that our democracy is a product of a negotiated settlement profoundly expressed in the countless acts of confrontations, negotiations and compromises between the proponents and the opponents of the status quo.
It also says that our struggle is profoundly expressed in the interactions between the workers and the employees in the union movement; between activists who organise consumer boycotts and business leaders.
Finally, it is a product of negotiations between the imprisoned and exiled leaders of the liberation movement and the apartheid government itself. It was out of this wealth of experience that a better South Africa could be created.
As legislators, we are reminded that, at all times, we are enjoined by this Constitution, which has become the bedrock of our democracy and, on an ongoing basis, we have to review current and past legislations in order to improve and better the quality of life of ordinary people.
We are, therefore, expected at all times to act in the interest of ordinary people, in particular the poor. We have to act in such a way that we reduce the sharp divide between the poor and the rich and eradicate the societal polarisation of our country, caused by socioeconomic inequalities.
I am pleased to present the much-anticipated recommendations of the Standing Committee on Finance with regard to the proposed changes contained in the Taxation Laws Amendment Bill of 2009, tabled by the Minister of Finance, Pravin Gordhan, on 1 September this year.
The objective of the Taxation Laws Amendment Bill, 2009, is to give expression and meaning to the tax measures and other aspects of the fiscal framework meant to provide and consolidate a strong base for our economy to remain resilient in the current global financial crisis. The Bill is, therefore, in line with the objectives of streamlining fragmented taxation laws inherited from the pre-1994 period.
The Bill seeks to enhance and protect the competitive urge of the South African economy in a global and economic environment. It seeks to reduce leakages within the systems where tax avoidance and tax evasion has become a practice. It seeks to maximise revenue collection locally and internationally from companies and individuals, trading or doing business within our shores and beyond. It seeks to fast-track economic integration and stimulates growth.
In processing this Bill, the committee asked itself the following questions and posed the following challenges: How will these proposed amendments improve or benefit ordinary citizens of our country? What is the impact of the current global financial downturn and its impact on job creation or job losses? What will this Bill do to alleviate the plight of families of retrenched workers? What are the implications and impact of revenue deficit or under collections, as already announced in this House by the Minister of Finance? What are the overall implications of all these challenges to the priorities of government in the next five years? Lastly, we had to consider the sustainability of small and micro enterprises.
The interests of stakeholders were very positive and impressive, which showed the centrality of tax laws to the fiscus and the role of business, labour and civil society in our economy. The committee received extensive written and oral submissions from various sections of our society, ranging from organised business, multinationals, financial sectors or institutions, and representatives of corporate South Africa in the form of KPMG, Webber Wentzel, PricewaterhouseCoopers, Deloitte & Touche, Independent Producers Organisation and Business Unity South Africa, Busa. It is also our considered view that the voice of ordinary citizens and small businesses in particular still needs to be heard loudly by Parliament through its committees and relevant forums. Therefore, it is important that, as we say we are an activist parliament, we should devise means and mechanisms to make matters of this nature and other related issues more interesting to the whole of society.
After careful considerations, the committee is of the view that the overall thrust of the proposed amendments does complement the stimulus package that government has put forward in response to the current challenges, as espoused by the national framework response agreement.
We must also commend the pre-emptive and proactive steps by the former Minister of Finance, Trevor Manuel, who, earlier this year in February, presented a Budget in which he made personal income tax adjustments that have resulted in an amount of R13,5 billion as a tax relief to individuals. Although at the time of reading this Budget signs of possible economic recession were there, none of us could have predicted the seriousness of and the impact this recession would have on all economies, irrespective of their size, in the whole world.
We are confident that this tax relief has and will continue to play a significant role complementing the much needed spending power or disposable income of individuals and households to sustain the demand-side of our economy, particularly in the local manufacturing sector.
Most importantly, the new tax treatment of lump sum withdrawals of retirement savings must not serve as a perverse incentive for workers to withdraw their much needed retirement savings today when those savings will be needed in the future. This is both a challenge and an opportunity to us.
In conclusion, it is our view that the present amendments as proposed should be supported and we recommend that this House supports the proposed Taxation Laws Amendment Bill, 2009, as a step that will take the country in the right direction.
Thank you. [Applause.]