No budget, no growth for South Africa

You can be forgiven for thinking this morning that you fell through a tear in the Matrix and ended up in an alternative reality….

One where DA leader and Agriculture Minister John Steenhuisen is defending the downtrodden and the poor and the ANC are the neocolonialist oppressors of the underclass.

That is, of course, if you believe the narrative launched – pre-emptively possibly – by Steenhuisen yesterday in the unprecedented postponement of the 2025-26 budget.

According to him, the DA fought tooth and nail to prevent its ANC partner in the government of national unity (GNU) from imposing a shock two percentage point increase in value-added tax (VAT).

While that increase would have hurt the poor the most, it would also, undoubtedly, be a strong disincentive for economic growth.

That the GNU was even discussing the move does, however, show what dire straits our government finances are in. Money needs to be raised somewhere, somehow.

ALSO READ: Budget speech postponement shows GNU is not a rubber stamp

And the 7.5 million long-suffering individual taxpayers who account for about 40% of all government revenue, have long since been bled dry.

If indeed it was the ANC pushing the GNU to agree to the VAT hike, the obvious question needs to be asked: what did you look at to help cut government expenditure?

We’re not great fans of Elon Musk, but you have to admit that he and his boss, US President Donald Trump, have not been afraid to wield the axe in Federal departments for fear of alienating their supporters.

For decades, the ANC has been unable to bite the bullet of dealing with bloated government wage bills… because civil servants are voters, too.

Interestingly, the GNU itself hasn’t exactly helped when it comes to cutting spending.

The row, though, has damaged the image of the country and no doubt will see the rand plunging further. It’s just made a bad situation much worse.

NOW READ: Budget speech: ANC ministers also opposed VAT hike, Godongwana slams DA’s ‘identity crisis’