WEDGED IN, GODONGWANA PLAYS IT SAFE

“This is not an austerity budget,” finance minister Enoch Godongwana assured everyone from the podium at Cape Town City Hall on Wednesday. Instead, he said, it’s a budget in which “tough trade-offs” had to be made.

Well, there was little sign of those “tough decisions” in his speech, which was remarkably barren when it came to structural interventions on state-owned entities, wooing foreign investors or cuts to the bloated administration.

Even the headline announcement that R254bn of Eskom’s R400bn debt will be transferred to the government’s balance sheet, freeing the hand of the power utility to invest in its plants, was pretty much just a shuffling of deckchairs, since much of this debt was already underwritten by the government.

There had been much anticipation about measures to encourage homeowners to install solar power, but the incentive — just 25% of the cost of photovoltaic panels up to a maximum of R15,000 for one year — was hardly visionary.

As energy analyst Chris Yelland puts it, this was “way too timid”. In particular, Yelland says, there was no VAT or import duty relief for solar panels, inverters or batteries.

This underscored the sentiment from the opposition benches too. Dion George, the DA finance spokesperson, says there is “nothing bold about this budget”, with Godongwana keeping the status quo, rather than making meaningful changes.

“This budget completely ignores the country’s mounting debt problem and, in fact, adds to it. It offers no solution to revitalise state-owned enterprises or address the energy crisis,” he says.

Missed opportunities include failing to shift more products into the zero-VAT food basket, or cutting fuel levies.

To be fair to Godongwana, no finance minister in recent years has had so little room to work with, or so much pressure. It was a glaring contrast to the 13 years in which Trevor Manuel presented budgets typically accompanied by gushing reviews of his heroic efforts to slash taxes.

Godongwana had to deliver his speech during stage 6 rolling blackouts, with dark muttering about a total grid collapse.

So that was the milieu. And it certainly was a pleasant surprise that the government collected R93bn more in tax than it expected, raising its take to R1.69-trillion. There was an audible sigh of relief that this allowed Godongwana to avoid tax hikes.

Will the country be better off as a result of this budget? That’s debatable.

Public finances remain messy. Even though Godongwana kept a lid on state spending, which will rise by only 2.9%, by 2025 the country will be spending 18c of every rand collected to repay debt. That’s money that could have been spent profitably elsewhere.

Nor is the Eskom shell game likely to resolve the energy crisis. But then, resolving these issues is perhaps not something that can be achieved through a budget anyway. Rather, this goes to the heart of South Africa’s condition: as the R93bn overrun shows, it’s not so much that we lack money, it’s that we often mismanage, squander or steal it.

On this score, it’s up to President Cyril Ramaphosa to ensure accountability. It’ sa management issue, and that’s where we’re falling short.