To be popular is not a finance minister’s job. If an incumbent to the post is concerned with being universally loved, then they would be in the wrong portfolio. 

What finance ministers and their departments do is at the heart of what politics is about – manage the distribution of a nation’s scarce resources to meet the country’s many and competing needs. As a result, no finance minister, even in rich countries, can deliver a budget that is enthusiastically welcomed by everyone. 

While Sowetan, like the vast majority of South Africans, would have preferred that Value-Added-Tax (VAT) is not increased, we are relieved that finance minister Enoch Godongwana has revised down his initial proposal to raise the tax by two percentage points from 15% to 17%. He has now proposed a 0.5- percentage-point hike for this fiscal year and another 0.5-percentage-point raise in March next year – which will bring VAT to 16% by April 2026. 

The heated debate over a VAT increase forced Godongwana and President Cyril Ramaphosa’s cabinet to abandon plans to deliver the budget last month as most of the parties in the government of national unity (GNU) were opposed to the proposal. The debate is sure to continue further in coming days as MPs debate aspects of the proposed budget before finally voting on whether it should be approved or not. 

Although opposing any form of increase may sound popular and something that would win individual politicians and political parties future votes, the budgeting process is too serious a matter for politicians to see it as an opportunity for points scoring. 

Hence we hope that the upcoming debate and vote on the budget would be dominated by serious and constructive discussions on policy alternatives, if any, that could have helped National Treasury raise the R60bn additional revenue it needed without raising VAT or cutting much-needed spending on social welfare and other delivery areas. 

Godongwana says they opted for a VAT increase, instead of raising corporate and personal income taxes, because the latter taxes were going to generate less revenue while, at the same time potentially harming investment, job creation and economic growth. Weighing the pros and cons of such policy choices requires more than sloganeering about a “pro-poor” or “anti-poor” budget. 

But it is also important to remember that the budgeting process alone is not going to solve SA’s economic problems. The reality, as Godongwana reminded us in his speech, is that our economy is not growing at a fast enough pace for the country to have larger fiscal resources to meet its developmental goals. 

Over the past decade, GDP growth has averaged a meagre 2% when comparable economies across the world were growing at much higher levels. This is the source of our problems and unless there is common vision to remove all the barriers hindering economic growth, SA will always find – come budget time – that available resources fall far short of public expectations and demands.