Mboweni’s bold move

FINANCE Minister Tito Mboweni surprised the financial experts, analysts and the markets.

The analysts were confidently predicting an austere Budget, which would add more pain to an economy already in distress.

But Mboweni did what many thought would be an impossible task: present a Budget without spooking the markets and which would be well received by the general public and the business community.

How did he do it with the fiscus so constrained? Surprisingly, there were no major tax increases. Everyone was expecting personal tax and VAT to go up. It was almost a certainty. But no, Mboweni did not increase personal income tax and VAT.

He targeted reckless government expenditure and was determined to bring it down. He took a gamble and boldly slashed the hefty public sector wage bill.

This will certainly not go down well with the public servants, and a major battle looms between them and the government, causing disruptions and further deterioration of service in the public sector.

Despite all the talk of not bailing out SOEs, the government has actually dished out R162 billion in the past year to corrupt and cash-strapped public entities. Under the guise of restructuring, Eskom would get a hefty R112bn in the next 10 years, while SAA would be given R16.4 bn to keep it in the air. We understand the strategic nature of Eskom. But SAA? It’s only for the rich.

As always, the finance minister hit the motorists and the pleasure-seekers hard. He raised sin tax and the fuel levy. While social grants got an increase, the Budget wasn’t really for the poor but for the middle class.

It was cleverly crafted to attract foreign investors back into the country and to stimulate growth.

But what made me chuckle was Mboweni’s announcement that the men of the cloth would no longer be able to flaunt their wealth without paying the taxman.

What’s so special about them that they should be exempt from tax? It’s an old privilege from colonial times to promote Christianity.

Like we all do, it’s about time they paid their dues as well. Let’s see how many honest pastors there are who declare their tax status.

T MARKANDAN Kloof