Tito budget step in right direction

Finance minister Tito Mboweni has had a fine start to the job, helping to restore stability to a National Treasury that was rocked by Nhlanhla Nene’s sudden departure last month. Mboweni’s sterling performance during his maiden medium-term budget speech yesterday should prove even to sceptics that President Cyril Ramaphosa did not make a mistake when he recalled him from retirement and gave him arguably the most difficult job in the cabinet. Under extremely tough conditions that make it almost impossible for government to manoeuvre, Mboweni managed to announce some measures that would make the poor happy. Perhaps among the most significant of these was the announcement that VAT would soon be abolished on sanitary pads.

It is a decision that would make sanitary towels more affordable for scores of women and girls, especially in rural areas. But as much as we welcome government’s decision on this score, we will have to be vigilant that the savings are transferred to consumers and do not remain with retailers.

The majority of South Africans would have also been relieved to hear there were no plans to introduce new taxes over the next three years. However, they would have been disappointed Mboweni said nothing about reducing taxes on fuel, books and other essential goods and services.

While we are cognisant of the fact that the cash-strapped government cannot give in to all the public’s demands for the zerorating of certain goods, we are of the view that it should at least work out a plan that would see such taxes phased out over a number of years. Mboweni is correct to, like his predecessors, flag the ballooning state salary bill. It is a matter of deep concern that 35% of government expenditure goes to staff salaries, this in a country with so many pressing social problems that require funding from the national fiscus.

However, the state is unlikely to succeed in initiating a conversation on how to curb the unsustainable rise in its wage bill if the cabinet doesn’t cut back on its own spending. It is for this reason that we agree with Mboweni that the executive should be reduced from the current 70 ministers and deputies to a cabinet of 25 ministers.