Godongwana applied commendable dexterity to leverage the luck he had to ease the noose around SA's neck. BudgetSpeech2022
Finance minister Enoch Godongwana, in his maiden budget speech this week, off-handedly joked about the"generosity" implied in the fact that there will be"no increases" to a range of taxes. He laughed as he said it, perhaps in recognition that it was a tongue-in-cheek statement.
But the fact is, Godongwana was given this leeway not through any innovative or smart policy decisions by his government, but rather through the blind luck of soaring commodity prices. It also allows for an easing of SA’s debt metrics: Treasury now expects the country’s debt-to-GDP ratio to peak at 75.1% — considerably better than previous talk of more than 90%. In a country where 20c of every rand collected in tax goes to pay state debt, this is a considerable bonus.
That is the issue. While Godongwana used the mining windfall to create breathing room, this isn’t the budget that will extract SA from its quagmire.
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