Finance minister Enoch Godongwana’s attempt to foist a VAT hike on the country was a spectacular and embarrassing failure, suggesting desperation on his part in that he seems to have had adequate warning that the proposal would not pass muster in parliament.
Apart from the DA's opposition to the move, even ANC ministers rallied against it just hours before the minister was due to address parliament, despite the party's top seven having been briefed beforehand on the National Treasury’s intentions.
Notwithstanding some ANC ministers’ attempts to distance themselves from the hike, the affair has not for the first time pitted the ANC against its junior GNU partner, the DA. On previous occasions when there was a difference over legislation, the DA had to blink and stand down.
On this occasion, however, with the ANC unable to hint at securing a parliamentary majority by appealing to either the EFF or MKP, the DA was able to threaten to withhold its vote, dressing up its position as striking a blow for the ordinary person and demanding a “pro-growth” budget.
The ANC emerged from the shambles with its critics on the Left further emboldened by what they see as a neoliberal grip on the party’s policies as they are either diluted or rejected in the GNU. They will relish pointing out that the increase would have further impoverished the working class while the middle class would shrug it off as just another increase that will hardly dent their standard of living.
Ironically, amid the prognostications of doom for the country, all is not lost. The likelihood of a budget more to liking of the DA and ANC critics is quite probable when the revised budget is tabled on March 12. How exactly this will come about, with Godongwana looking to fill a R58bn hole in his budget, remains to be seen.
More important than the politics about the budget cancellation is the imperative that the political one-upmanship that accompanied it should not be allowed to obscure the more pressing economic difficulties in which South Africa finds itself almost 31 years into democracy. At the core of our malaise is the absence of confidence in the political and social environment — and where there is no confidence investors stay away. Jobs and growth will remain elusive.
There is no reason this should be so. After all, South Africa has mining, agricultural and tourism potential that is the envy of other nations. We have stable government, excellent financial and legal systems, a substantial middle class, skills and talent in abundance and a youthful population.
A faltering economy brings the entire South African democratic project into disrepute, raising populist calls for more control and less freedom in the economic sphere
Yet in spite of our natural bounty growth has been minuscule as business is weighed down by red tape, infrastructure crucial for further investment is allowed to deteriorate and millions are condemned to unemployment.
On top of this we have a bloated civil service, stacked with bureaucrat millionaires who, unlike teachers and nurses, never seem to be in the line of fire when headcounts have to be reduced or critical posts frozen.
Our state-owned companies have become centres of sheltered employment, with devastating consequences for their role in acting as engines of growth and employment. A faltering economy brings the entire South African democratic project into disrepute, raising populist calls for more control and less freedom in the economic sphere.
Put simply, we are living beyond our means, bent on prioritising our every fanciful wish without a serious thought about where the money will come from.
In the weeks ahead the parties will have to put aside politicking in the interests of all South Africans. Hopefully our leaders across parties will show the political maturity to contemplate the trade-offs necessary to surmount the crisis.
Let’s hope that as much attention is paid to expenditure and cutting waste, and to examining urgently policies that will unleash the full economic potential of our country upon which the prosperity of all South Africans rests.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.