Godongwana must target government belly fat, not hungry households

Godongwana must target government belly fat, not hungry households. 

It's not a job for the faint-hearted.  Finance Minister Enoch Godongwana must sometimes wish he were in charge of sport or fisheries, rather than the national budget. 

The Minister would have us believe there is precious little wiggle room to balance his books, and that squeezing taxpayers is his last resort. 

Not so, according to many experts who have taken the liberty of making some money-saving suggestions that, if properly implemented, may obviate the need for the dreaded VAT hikes envisaged by the current fiscal framework. 

Since Budget Day civil society has produced a multitude of alternative budget proposals, some more robust than others, which suggests Gondongwana may have some wiggle room after all.  

A case in point is a 25-page submission on the Fiscal Framework produced by political party Build One South Africa. Other submissions include detailed proposals from other parties and civil society organisations such as the Institute for Economic Justice.  A common thread linking all these submissions is that Godongwana and his team missed several glaring revenue opportunities and cost-cutting opportunities.  

In no particular order, here are some of the assembled ideas Godongwana may wish to consider, along with estimates of potential annual budget saving  

• Cut bailouts to under-performing state-owned enterprises (R6,6 billion)    
• Trim VIP protection, excluding for the most senior leaders (R2,2-billion) 
• Incorporate the Department of Small Business Development into the Department of Trade, Industry and Competition (R2.4 billion) 
• Fix the Road Accident Fund (R20 billion)  
• Get rid of ‘ghost employees’ and trim state advertising revenue (unknown saving)  
• Increase tax compliance from 63% to 67%  (R60 billion)  
• Sell under-utilised state-owned land and properties (R10 billion)  
• Target expenditure reduction, particularly in relation to non-performing government programmes (unknown saving) 

Government should be commended for SOME progress in the aforementioned areas, such as bolstering SARS capacity to collect tax revenue. 

However, the unavoidable conclusion is that, in seeking to extract more from hungry households, government has largely shied away from addressing its own belly fat.  

Godongwana must surely know that endorsing this approach is unlikely to tip the scales in his favour.

John Lawson
CEO of the Cape Chamber of Commerce and Industry