Don’t be surprised if there aren’t surprises in the budget

Wednesday’s budget announcement better have some (positive) surprises. South Africa is on a knife’s edge, and despite a lot of talk, promises, action plans and crisis commissions, very little has happened over the past year to solve our biggest challenges.

This budget will be critical, as it will show which promises and plans will be implemented. It is the adage that if it isn’t in the budget, it won’t happen.

The most daunting and pressing issue is load shedding, which is holding the whole country and economy to ransom.

The National Treasury has been the best-functioning government department for many years. It always produces a budget which instils the perception that there is a sober comprehension of the country’s fiscal challenges.

However, National Treasury can only announce surprises if the national executive has taken bold decisions – something it hasn’t done in years.

The main challenges that need to be addressed are:

• The government must make additional funding available to Eskom to fix its generation and transmission capacity.
• Eskom’s R400 billion debt burden remains the elephant in the room. The budget needs to explain how the government will assume this debt to make Eskom financially viable.
• How much will the Eskom unbundling cost, and how will it be funded?
• Will funding be made available for Transnet to improve efficiencies?
• How will the current verbal fight against corruption be practically implemented?
• What is the magnitude of government support or tax concessions for solar installations?
• How will the government react to the imminent public sector strike, and has it budgeted for inflation-related concessions?

Unless Finance Minister Enoch Godongwana addresses all of these issues and proposes budgetary solutions, it will take another year before anything happens.

All of these issues also require significant funding.

All eyes will therefore be on the South African Revenue Service (Sars) to see whether its collections have exceeded its budget.

It is expected that Sars collected more than anticipated as its commissioner Edward Kieswetter has performed nothing short of a miracle to improve compliance.

He is also fighting against the government’s inaction and failures as this affects the taxes Sars can collect.

The continued load shedding would have hit most companies’ profitability, while many people have lost their jobs, and higher interest rates would have affected value-added tax (Vat) revenue.

Transnet’s failure to support the mining sector also muted a commodity revenue bonanza. A significant overcollection is, therefore, unlikely.

Godongwana’s budget will be revealing as to whether the president has actually actioned his promises. The finance minister can’t implement the necessary reforms if he isn’t instructed to do so.

I’ll be surprised if there are any surprises.