Words of wisdom - from Mike Abel regarding the State of the nation
Author: Admin@adcyxagency.co.za
Two weeks ago, South Africans watched yet another glitzy, mega-expensive State of the Nation Address (SONA).
Horse parades. Marching bands. Blue-light convoys. Lavish receptions. It looked more like a Hollywood red carpet event than the opening of Parliament in a country teetering on the edge of financial crisis.
And yet, here we are, being told by Finance Minister Enoch Godongwana (and I do feel for him) that we, the people, must dig even deeper to fund government spending through a proposed VAT hike from 15% to 17%.
Sorry, but Enough is Enough.
Let’s talk about where we really are. South Africa’s official unemployment rate is hovering around 31.9%. The expanded definition? A soul-crushing 41.9%. That means nearly half the country has no job, no income, no financial give at all. 13.2 million South Africans live in extreme poverty, scraping by on less than $2.15 a day (in a global perspective). And the response from government? Let’s hike VAT and make basic goods even more expensive for the people who can least afford it.
Meanwhile, instead of tightening the public purse, we’re expanding the number of ministers, bloating perks, and continuing to waste billions through endemic corruption and incompetence. If you were in financial trouble at home, what would be your first step? You’d cut unnecessary spending before running to borrow or squeeze more from those who already have nothing left to give. But not here it seems... No, first-class flights, luxury vehicles, and inflated salaries must remain untouched.
The argument that “we had no other choice” is nonsense. We always have a choice. And that choice must be economic growth, not suffocating an already struggling economy with more taxes. The only way out of this mess is through investment - both domestic and foreign (retaining AGOA too).
So here’s a novel idea: Instead of killing off consumer spending, let’s focus on creating wealth.
• Slash the fat. Cut government excess, reduce waste, and start treating public money as sacred, not a personal slush fund.
• Attract investment. Make it easy, safe, and attractive for local and global businesses to put their money here. Policy certainty, infrastructure investment, and crime control are non-negotiables.
• Back business. The private sector is the real job creator. Support SMEs, streamline regulations, and get out of the way.
• Prioritise growth. A bigger, stronger economy generates more revenue naturally - without punishing those already struggling to survive.
The truth is simple: We don’t have a tax problem. We have a growth problem. And until that is fixed, raising VAT is just putting a Band-Aid on a bullet wound.
South African Government if you’re listening: It’s time to change course. The country can’t afford for you to get this so wrong.