Whatever Godongwana does, someone will feel the pain

It has become fashionable to portray South Africa’s finance minister as someone juggling balls in a careful balancing act as a way of recognising the unenviable task that person faces of reconciling government expenditure with income (or the lack of it).

For the past few years, ANC finance ministers have spared the middle class – the backbone of our country – from increasing tax burdens.

That’s probably not out of the goodness of their hearts, but out of the realisation that we are already one of the highest-taxed developing countries and that adding to the load might provoke a backlash from citizens whose patience has been worn gossamer-thin by load shedding.

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Minister of Finance Enoch Godongwana has to perform that familiar dancing routine … but he has less space on the stage to do so.

Economists say the state – its taxpayers – will have to take on all of Eskom’s R400 billion-plus debt.

Hiking taxes to pay for that will stifle any potential bounce-back of the economy from the shocks of the Covid pandemic and the fallout from the Russian invasion of Ukraine. Other experts are concerned about possible shrinking revenue for the SA Revenue Service (Sars) – especially from the emigration of high-earners. That scenario may have been exaggerated, especially for employees.

No matter how highly they are paid, they will be replaced and tax will continue to be generated. Less optimistic is the reality that some of those leaving are high-net-worth individuals who may be business owners.

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Not only does their tax disappear from the coffers of Sars, but so does that of any of their workforce, who would be out of jobs. If there is less money, there will be less expenditure, so health, education and policing may take a hit.

Whatever Godongwana does, someone will to feel the pain.