Expectations were all but rosy when it came to Tito Mboweni’s 2020 Budget speech. According to most experts, there was but one trick and that was to put a heavier load on already burdened taxpayers. But after an unexpected budget address, are there any more cards up the sleeve of those in charge of the SA economy?
The new budget surprised with no major tax hikes and no VAT increase. These announcements by Mboweni were met with relief. Might we hope that there is another way to save our economy? According to Mboweni, saving in the form of restricted state spending and stimulation through areas such as tourism are on the cards. This sounds good, but we’ve heard it before. It reminded me of Ramaphosa earlier this month, saying all the right things.
Similar to the state of the nation address, the budget speech acknowledged the challenges, admitted the mistakes and agreed to the inefficiency of methods supposed to affect change. With these acknowledgements, are South African voters and taxpayers supposed to be encouraged that there is a new way, that we have to stay positive, keep on believing? Is this reassurance of their weary audience, our leaders’ latest and only trick?
Our leaders know that many South Africans are poor, jobless and disillusioned. They know that one faction of the population is up in arms, demanding benefits, threatening political instability. They are also under no illusion about voters being despondent. They immigrate or when they stay, they stagnate when it comes to enthusiasm, innovation and investment. Commitment to get involved and make a difference is dwindling. Confidence is low and it shows in the economy.
Eskom, SAA, an almost non-existing growth rate and the looming credit ratings can’t be wished away, but it has to be granted that the one-trick pony did bring a sense of something positive to everyday South Africans. While some tax relief might not result in immediate growth, it might result in a better attitude. And while it would’ve been wonderful to have more ponies in the race towards saving our economy, when there are no more options on the table, a more positive sentiment might be your last card to play.
I believe in saving. When the environment is so negative that you run out of options to generate money, saving is a very good starting point. But a glimmer of hope has never hurt anyone.
Being in wine, we are obviously always interested in the sin taxes from which there are no escape. Excise duty will increase by 4.4% on natural wine, 6% on sparkling wine and 4.4% on brandy.