The South African Chamber of Commerce and Industry (SACCI) notes and welcomes the withdrawal of the proposed VAT increase by the Minister of Finance.
Whilst this is a positive move it is by no means a resolution of the bigger problem with our finances. We still have a serious problem with how to deal with the budget and in particular the deteriorating debt servicing costs to revenue. The situation is not sustainable, and we appreciate the difficulty the minister of finance has faced in balancing his revenue and expenditure options. We do not underestimate the complexity of the problem. This is no longer about the political parties or Government of National Unity (GNU). This is South Africa’s problem that will require all key stakeholders to spend more time looking for solutions instead of amplifying problems and differences as that does not take South Africa forward.
Our opposition to the VAT increase was based on the fact that it will make goods and services more expensive, and this will contribute to the loss of business confidence and aggravate the slow economic growth and unemployment. We are not yet convinced that enough expert work has been undertaken to investigate and look at expenditure throughout the government service. Other than a budget being a budget, it should also serve as a management information tool that gives insight that leads to management action. Data and analytics will help us to get a grasp of what is really happening with expenses and at this time we are not clear on this aspect.
To get the level of granularity required would need an external resource to undertake the work.
The National Treasury staff are engaged with their day to day and may not be the appropriate resource in this case. This work should encompass all levels of government and not just national departments as local government actions have a significant impact on the economy. We need this work to be commissioned as a matter of urgency.
Contact: Alan Mukoki SACCI CEO Cell: 082 551 1159