MTBPS: More jobs, not more tax, needed

To be brutally honest, the average South African couldn’t care less about all the financial jargon bandied about when government delivers their medium-term budget policy statement.

But what most people took from Finance Minister Enoch Godongwana’s medium-term budget policy statement – a preview of government’s public finance plans over the next three years – was that we don’t have a clear-cut plan to get out of this mess other than the suggestion of taxing us even further.

Godongwana said: “The economic outlook over the medium term remains weak, reflecting the cumulative effect of power cuts, the poor performance of the logistics sector, high inflation, rising borrowing costs and a weaker global environment. However, our economy has shown signs of resilience.”

Was his medium-term budget bad? Probably not the worst. Was it good? Probably not the best, especially because it lacked detail.

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Senior researcher at the Southern Centre for Inequality Studies at Wits University Thokozile Madonko said: “What we need to ask is, how can we achieve growth, and what is needed to achieve growth, given the structural constraints.

“I would argue strongly that it is going to make things much worse in the short term.”

The only way to improve the fiscal trajectory long-term is to accelerate economic and employment growth. Did we implement plans to do this? No.

Political analyst Arthur Shopola said: “Most importantly, the state needs to create employment. When you don’t create jobs, you really have to expect this crushing debt of billions because people cannot pay.”

For now, it seems we have far more questions than answers. It makes February’s budget speech – just a few months before an election – probably our most important since 1994.

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