Talk is cheap, because supply exceeds demand”. Should you prefer the proudly South African version – yes, there is one, first referenced in 1955 – it is: “Talk is cheap, but money buys whiskey.”
I imagine that in recent months, possibly years, you have been receiving lots of unsolicited talking (particularly about economics) that is reminiscent of the 1981 chart topper by the band Talk, Talk, with its chorus lyrics: “Talk, talk, talk, talk; All you do to me is talk, talk.”
A day after the State of the Nation Address on February 10, the International Monetary Fund released its ‘South Africa Country Report’ and on February 23 – a week after I wrote this piece – Finance Minister Enoch Godongwana was due to deliver his inaugural National Budget speech.
All this is reminiscent of the treble combination in show jumping, the last combination before the course is completed. Let me confess: I know this only because of those hot summer Saturday afternoons in the 1980s, when I was too lazy to get up and switch off the television. Yes, the days before the remote control.
I have no doubt the economic treble combination will leave one severely exasperated, but at least we now have the remote control.
In the instance of the National Budget, quite ironically, you can ‘make your voice count’. To get the context, go to ‘2022 Budget tips – make your voice count’, which is accessible at https://web.treasury.gov.za/public/Tips and reads: “As usual, the Budget allocation always aims to strike a balance between competing national spending priorities. It is in this context that the Minister invites South Africans to share their suggestions on the Budget: what should government be spending on, how to address a large Budget deficit, new sources of tax revenues, and other Budget-relevant information.”
Let’s explore the elements: ‘national spending priorities’, ‘address a large Budget deficit’, and ‘new sources of tax revenues.
The ‘Spending priorities by function’ section of the 2021 Budget Review states: “To reduce poverty and inequality, the consolidated Budget continues to prioritise social objectives, with 56.6% of allocations going to the learning and culture, health, and social development functions over the medium term.” A reminder: yearly total consolidated spending amounts to R2-trillion. “The bulk of the spending is allocated to learning and culture (R402.9-billion), social development (R335.2-billion) and health (R248.8-billion) in 2021/22.”
To ‘address a large Budget deficit’ – it is important to remember that, according to the 2021 Medium-Term Budget Policy Statement: “The R4-trillion in debt that we now owe is incurring debt service costs that will become the largest portion of spending, compared with individual functions, from next year.” We are in ‘next year’, and the number is now R4.2-trillion.
As for the ‘new sources of tax revenues’, are they national or provincial, or both? The 2021 Budget Review states: “Reducing the proportion of budgets spent on salaries will allow provinces to expand the healthcare system, build more schools and improve service delivery. Provinces will continue to reduce their costs by merging entities, improving integrated planning and exploring new revenue sources.”
Just who is going to pay the taxes? Remember, in the third quarter of 2021, unemployment hit a new record of 34.9%. However, under the expanded definition, the figure is 46.6%. As for actual taxpayers, according to a March 3, 2021, media report, 1.6-million people are paying most of South Africa’s income tax. Well, it’s actually 1.58-million, or 2.62% of the population. In the 2019/20 tax year, the South African Revenue Service noted 22.2-million registered taxpayers.
So, where will the additional taxpayers come from, and how additionally will they and the existing taxpayers be taxed? And how will South Africa’s debt be repaid?
The talking needs to stop. As Proverbs 14:23 states: “All hard work brings a profit, but mere talk leads only to poverty.”