Key points
After a tense build-up to one of the most anticipated budgets in SA’s democratic history, South Africans were left disappointed by the postponement of the budget for another three weeks. Objections within the GNU to the ANC’s proposed VAT increase scuppered the budget. There was no point in proposing something that the members of the GNU would not vote for.
This budget was stillborn, and while it might reflect democracy in action, it is massively disappointing that there was not enough consultation within the GNU to avoid this embarrassment. The ANC has a lot to answer for, but so too do the other members of the GNU that should’ve had greater oversight of the budgeting process to voice their objectives sooner than they did.
Baseline view
The pushback against the VAT increase is welcome. SA’s government should focus on reducing wasteful expenditure before approaching the tax base with an increased burden. SA’s tax base will not easily be squeezed much further, and the risk of negative consequences is high. One hopes the proposed budget in March will address many of the concerns in the article below.
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