A budget that caters to the middle-class

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.

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 government.

Despite all the talk of not bailing out SOES, 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 R112 billion in the next 10 years while SAA would be given R16,4bn to keep it in the air.

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 with glee 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 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. |