“Minister Gordhan has promised that the budget will inspire confidence even though the country has some tough decisions to make. This will only happen if the Minister maintains focus on the medium and long term in order to set the scene for economic growth,” says Ettiene Retief, chairperson of the National Tax and SARS Stakeholders Committees at SAIPA. “The pain we will certainly have to take will only be bearable if the taxpaying public is confident that its money is being wisely spent, and that the foundations for long-term prosperity are being laid.”
For example, two of several pressing issues that the budget will need to address are the need to prop up the finances of the higher education system in the wake of the #FeesMustFall campaign, and the drought. However, the measures proposed must do more than alleviate the short-term crisis, they must contribute to the long-term vision and be sustainable.
Three key actions should be integrated into the budget in order to inspire or restore confidence in the economy:
As an example, Retief points to the underspending on infrastructure which, he believes, is partly to blame for the bad situation in which the construction industry finds itself now. “It geared up to cope with demand that did not materialise and now that the economy is ailing, it is suffering,” says Retief.
This means ensuring that money is spent in line with the long-term national strategy, as set out by the National Development Plan. “Simply acquiring assets or completing projects is futile unless they advance the national agenda as a whole,” he argues. “We need a mechanism to ensure that all government entities are pulling in the same direction. Even short-term projects, such as drought relief, should be conceptualised in this way. We cannot afford simply to apply Band-Aids.”
It is common cause, and validated by the auditor-general, that enormous sums of money are squandered through fruitless and wasteful expenditure, aside from corruption. “This has been going on for decades now, and it has to end,” says Retief. “Taxpayers need to see that action is taken to bring underperforming officials into line, and to hold them accountable for the spending of public money.” When taxpayers do not see the return for the taxes paid, and feels disgruntled with how the tax revenues are spent, those taxpayers will consider ways to avoid paying taxes. It’s about tax morality.
The Finance Ministry cannot do all this on its own. Retief concludes, “We are looking for ways in which other organs of government can be involved to help the Ministry achieve these goals - it is a big ask, but it can and must be done.”
