Gigaba gets balance in rough seas

Finance Minister Malusi Gigaba delivers the 2018 Budget speech.
Finance Minister Malusi Gigaba delivers the 2018 Budget speech.

If President Cyril Ramaphosa's State of the Nation Address inspired the majority of citizens to look forward to a brighter future following the fall of Jacob Zuma, Finance Minister Malusi Gigaba's budget speech reminded us that there are still too many hills to conquer before we get to that brighter day.

Gigaba stood before the nation yesterday knowing very well that he could not claim to be a popular finance minister with the electorate, the markets and the international investment community. His association with allegations of Gupta influence over the state has meant that he has lost much trust among important constituencies and that many now assume that it is a matter of days before President Ramaphosa fires him from the post.

With all these challenges burdening his mind, Gigaba still managed to deliver a balanced budget under the trying circumstances of a sluggish economy and growing public expectations of free higher education for the poor, universal access to public health care as well as a rise in other forms of social spending.

Although the increase in value added tax by a percentage point is set to hit many of us hard in the pocket, the National Treasury had little option but to do so if it was to have any chance of bridging the R50-billion deficit in the budget.

We welcome the fact that government has tried to minimise the impact of the hikes on the poor by keeping basic foodstuff such as bread, maize meal and fish oil zero-rated.

Given the enormous amount of work ahead in fixing the economy following almost a decade of misrule by Zuma, and the fact that the global economic environment is unlikely to drastically improve any time soon, we should be preparing ourselves for a period of belt-tightening.

But it is going to be hard for the government to convince citizens to accept cuts in social spending, a freeze in public sector wage increases and other belt-tightening measures if the government itself continues to be wasteful. This is why the fight against corruption, as well as the reduction of the size of cabinet, should be at the centre of the Ramaphosa administration as this would ensure that public funds are used for what they are meant for.