When the honourable minister of finance delivered his Medium-Term Budget Policy Statement (MTBPS) on Wednesday, he ‘opened the debate’.

But where are the arguments?

Surely this was nothing more than a long-winded slam-dunk statement, forewarning the ill-fated taxpayer of bad tidings?

Tito Mboweni must have struggled to find an allegory to portray the last ten years, so he chose a harmless little aloe when presenting his annual budget speech in February – and brought it back on Wednesday. It had survived a long winter. But that was not necessary. He could have chosen any zombie state-owned enterprise (SOE), and the only offended parties would have been those corrupt cadres who have over the last decade sucked all the sap out of them.

When the government wants to take more money from taxpayers, mention is made of the poor. But not the poor who have suffered corruption at the hands of state officials (remember the irregular expenditure of about R1 billion incurred by the South African Social Security Agency?). Not the poor who have to suffer the state-owned hospitals, nor the lousy outcomes-based educational system. The government does not claim any responsibility for any poverty or suffering.

‘Solution’

Mboweni’s solution for assisting the poor, curtailing the increasing national debt, diminishing the excess of expenditure over income, righting the ailing economy, and preventing the ongoing xenophobia is to shake the flipping baobab tree.

Perhaps our honourable minister ran out of nerve to say he plans to shake down the taxpayer like a rat.

As for the National Development Plan, where is the new life? Where are the new industries that have sprouted, generating an increase in employment, and thereby new revenue to tax? This is still just talk, right?

And as to the Independent Communications Authority of South Africa (Icasa) “accelerating” the licensing of high-demand broadband spectrum licensing, sadly Icasa is drowning under the weight of responses to its latest badly-thought-out draft regulation on transforming the telecommunications sector.

South Africans do not need a “reimagined industrial strategy”.

We need proper governance, laws that are implemented, honest government officials, a reliable power supply, safety and security, streamlined processes to enable the fast registration of businesses and the obtaining of necessary licences, and a police force we can trust.

Accountability

We need to hold state officials to account. Put corrupt officials in jail, not offer them employment in another SOE. Government must put an end to cadres expecting payback, and should spend more time worrying about the unemployed youth who face a bleak future. Government should stop interfering in businesses and sectors of which they have no knowledge.

‘Reorganising’ Eskom and other SOEs does not cut it. Government must stop the leakage, the continuous bleed. It would cost the government less to place the employees of culled SOEs on permanent pension.

As for the inept executives earning salaries they would never get in the private sector, they should simply be fired.

Sars Commissioner Edward Kieswetter may have reinstated the Large Business Centre, but it is a hollow shell of what it once was. It will take at least three years to attract skilled staff and create a pipeline of large complex income tax cases that will result in additional tax.

Staffing up the customs, Vat and payroll audit functions will result in more immediate wins.

It is unlikely that Sars will be able to meet its target over the next few years. This means government will have to raise additional taxes from the diminishing pool of taxpayers. Or use other means to raise funds (toll roads and fuel levies), which have a devastating impact on the poor.

‘We must’ – then why don’t you?

Mboweni’s comment that “We must also wean state-owned companies off the national budget. They must also stand on their own feet” shows ignorance of the many SOEs (and funds) that don’t earn income and receive government grants – Brand South Africa as an example. What is to be done about these? Will they be culled?

Mboweni is likely to rue his words that the South African government is subsidising “wealthy bond holders” when the country is downgraded and these “wealthy bond holders” dump those bonds.

Taxpayers deserve to know the total cost of the some 1 000 SOEs and state-owned funds. It is unlikely that the minister has any idea.

The government can immediately cut costs by halving the boards of directors of every SOE. There isn’t one SOE that should be paying bonuses.

Before the government decides to raise taxes, it should consider which entities should be culled. Let us have a debate about this.

It is impossible to hold a debate without knowing the facts. The government should provide some. The public may come up with better ideas to cut costs and wastage.

https://www.moneyweb.co.za/moneyweb-opinion/columnists/mtbps-warming-up-for-a-shakedown-of-the-taxpayer/