For a country whose finances are so deep in the dwang, it’s astonishing how South African political leaders babble on about a nuclear build programme, a National Health Insurance scheme and free university education for anyone who feels entitled to one.
Yesterday’s mini budget provided the cold shower avoided in February by Pravin Gordhan’s bold commitment to save R25bn eradicating waste and corruption in State procurement. That drive has yielded some results despite the best efforts of the tenderpreneurs and their political cohorts. But it is no longer enough.
Gordhan’s frustration at being blocked from getting his hands around SARS is palpable. The efficient machine he built while Commissioner has had the equivalent of sugar poured into the fuel tank. In 19 months since taking over as the new Commissioner, Zuma-ally Tom Moyane ejected 55 seasoned SARS executives. And now – surprise, surprise – tax collections are running a massive R23bn behind what was budgeted.
The Finance Minister yesterday warned an extra R28bn in fresh tax will be needed to balance next year’s books. The simple way, but the riskiest politically, would be raising VAT from 14% to 16%. The difficult approach is to restructure and free up the economy and stop the bleeding at State-owned disasters like SAA and the SABC. Either way, the real message is clear: it’s time for SA to sober up. But will it?