Today’s Budget Speech incorporates several DA policy positions and is evidence that the ANC no longer governs alone.
The DA welcomes no tax rises and no bracket creep for the first time in three years.
In fact, this budget displays a wholesale rethinking of tax policy by National Treasury under a coalition government.
For the first time in 18 years, the VAT registration threshold for SMMEs has been adjusted from one to over two million Rand.
The DA also welcomes the upward adjustments in several other limits. These include tax exemptions for primary residences, an increase in tax-free savings account limits, turnover tax threshold increases as well as an increase in capital gains tax exclusions for individuals as well as businesses.
This budget signposts a significant shift for the DA. No longer is the party calling for better tax policy from the sidelines. The DA is in the room, influencing national budgets.
While the budget takes several steps in the right direction, areas for improvement remain.
Unemployment is unacceptably high while growth is unacceptably low.
We cannot be happy with 1.6 percent GDP growth.
This should be the bare minimum in order to stabilise GDP per capita, meaning South Africans don’t get poorer every year.
We deserve better and we deserve it faster.
A country that is serious about jobs needs ever more daring budgets and far better execution by departments.
The DA is also frustrated by the burden that several hundred SOEs place on the fiscus.
Not only do they frequently require bailouts and debt guarantees, but they also require the annual transfer of billions to SOEs, many of them pointless. For instance, the special appropriation to PRASA for rolling stock fleet renewal needs serious interrogation given news reports of rampant corruption in this space.
On the spending side, the country requires better funding to fight the illicit and illegal economy.
Tax revenue lost to illegal cigarettes and alcohol is money in the pockets of crime cartels.
No budget is perfect, but this one is an improvement. It shows responsible macroeconomic policy.
It marks the beginning of a different paradigm regarding taxes and it displays action, not only words, when it comes to assisting small businesses. It should be welcomed.