Gigaba lacks gravitas and credibility for South Africans to trust him with money

Finance Minister Malusi Gigaba had to sell tax hikes in his budget address at parliament, with questions mounting about his credibility. /Mike Hutchings/ REUTERS
Finance Minister Malusi Gigaba had to sell tax hikes in his budget address at parliament, with questions mounting about his credibility. /Mike Hutchings/ REUTERS

Malusi Gigaba will go down in history as the first person to bump up taxation on goods and services under the ANC government - but that is the least of his worries.

As controversy continues to swirl around him, Gigaba announced a one-percentage point increase in value-added tax in the 2018 budget yesterday to raise revenue to fund government's spending needs.

Raising the cost of living for all households is a hard sell at the best of times. For a scandal-fatigued and already hard-pressed nation, the last thing to demand is that consumers dig deeper to finance former president Jacob Zuma's disastrous legacy.

Apart from the drain on public resources and crippling state-owned enterprises, Zuma had bequeathed the new government the burden of funding his fee-free R57-billion education plan, hastily announced in December without proper consultation with the National Treasury.

With tax collection undershot by R48.2-billion, options for raising revenue were limited.

In truth, Gigaba had little to do with the compilation of the budget, or the decision to raise VAT. It could easily have been someone else presenting it had President Cyril Ramaphosa opted to swing his axe before yesterday.

Raising the VAT rate for the first time in 25 years ahead of what is likely to be a highly contested election next year could be politically suicidal for the ANC government and required public trust in the finance ministry.

Gigaba and his deputy Sfiso Buthelezi are both haunted by corruption allegations relating to state capture and were Zuma's controversial choices to replace the much-trusted Pravin Gordhan and Mcebisi Jonas.

Gigaba had to sell tax hikes, for VAT, personal income tax, the fuel levy and sin taxes, with questions mounting about his credibility.

For the first time since 1994, a political party boycotted the presentation of the budget. The EFF stayed away, labelling Gigaba as "disreputable, corrupt and unpatriotic", and a "stooge" of the Gupta state-capture network.

To add to Gigaba's woes, it emerged yesterday that a full bench of the North Gauteng High Court in Pretoria had ruled that he had deliberately lied under oath and breached the constitution in the matter involving Fireblade Aviation's application to open a VIP terminal at OR Tambo International Airport.

At a media briefing ahead of the budget presentation, he called for "resilience" from South Africans to take the pain of the tax increases.

Gigaba said the poor would be largely cushioned from the sting of the VAT hike due to zero-rating on basic foods and would benefit from above-inflation increases to social grants. He said the moves to cut expenditure by R85-billion and increase VAT would stave off another credit ratings downgrade.

But Gigaba was slammed by opposition parties, with the DA saying his announcements were "nothing less than a massive body blow to poor South Africans", and objecting to him delivering the budget.

At the media briefing, Treasury director-general Dondo Mogajane said he had to reassure his staff to persevere with preparing the budget despite the "noise" and political uncertainty over the past few weeks. He said finance ministers came and went but the Treasury's work was dictated by the constitution and not by individuals.

"It has been painful as you can imagine, with a new minister here and there," said Dondo in reference to the axing of Gordhan and Nhlanhla Nene before him.

Gigaba's first budget was an uphill climb, partly because he was the bearer of bad news and mostly because he was not the person who could rally South Africans to give the government more of their money. To restore economic confidence and stabilise public finances requires more than rapping Kendrick Lamar lines: "We gon' be right, we gon' be alright." It requires gravitas, public trust, out-of-the-box thinking and, mostly, credibility.

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