Put the knife in deep to save the economy

There are two ways of looking at the goings-on over the on-off VAT increase.

It’s either a shambles, or a fine example of democracy in action as myriad parties – even those with minimal support – got in on the act, either for or against the hike.

We tend towards the former assessment as it appears the whole drama was about political points-scoring and not really about poverty-stricken or financially struggling South Africans being put under more pressure.

The accusations and counter-accusations, the back-stabbing and the name-calling were not the best advert for democracy, SA-style.

Whether the DA’s tactics amounted to extortion or not still has to be adjudicated and time will tell whether the smaller parties’ initial votes with the ANC might backfire on them in the 2026 local government elections.

However, there is a silver lining to this cloud of political squabbling – and that is that it may have been a watershed moment, not only in our democratic process, but also in how our economy needs to be structured to survive.

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Finance Minister Enoch Godongwana needs to fill the R75-billion hole left by the cancellation of the VAT increase.

And cost-cutting is, inevitably, going to have to be on the cards.

But not just the trimming of the excessive civil payrolls or even the massive social grants project – the elephant in the spending room is the array of bloated state-owned enterprises that have jointly sucked up R500 billion in taxpayer bailout money in the past decade alone.

Their failure has nothing to do with the principle of state capitalism – or, as many wrongly call it, communism – but with the fact that ANC cadres and their accomplices have regarded these entities as the trough at which they can gorge themselves.

Those SOEs that cannot stand on their own feet financially must either be closed, or sold off to the private sector, taking care in that process not to damage the strategic interests of the country, or to leave it at the mercy of rapacious privatised entities, as has happened in the UK, following the large-scale sell-off of state companies initiated by Conservative Prime Minister Margaret Thatcher.

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There appears to be little appetite from proper business people for buying into, or taking over, these SOEs – look at South African Airways, for example, and its failure to interest partners, or even financial institutions, to lend it money.

Part of the reason for that must be that they would be all too aware they would have to do some serious pruning of the deadwood right throughout these organisations.

Given that the deadwood might well be ANC cadre deployees, they must realise they would get little support from the government or the unions in any necessary restructuring.

Alternatively – and this is in the realms of weapons-grade wishful thinking – the government could undertake the closing or right-sizing process itself.

If they could get that past the unions and the various party executive branches up to national level, then we might have a chance as a country.

Imagine an efficient profitable rail system, power grid and port authority – but without an unnecessary “national” airline – and the revenue and money saved being put towards a genuinely caring social network, from grants to free health care.

That would really be a better life.

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