Your columnist Peter Bruce is spot on when he points out that the proposed hiking of VAT “as the only answer to a 20-year-old funding problem is intellectually lazy, politically disconnected and morally bankrupt” (DA may finally have found its Mojo, February 20).

DA leader John Steenhuisen was quick to issue a media release, after the budget postponement debacle, in which he promised “to fight … to introduce a new budget that is anchored in growing the economy, rather than increasing taxes or debt”.

The 286 state-funded entities in the DA’s crosshairs should be considered carefully with a view to privatising, rationalising or liquidating them because they are a drain on the country’s resources. The bloated cabinet and public administration also need pruning. Cadre deployment is so “last year”.

Without business confidence, fresh investment, whether sourced locally or internationally, does not take place and the economy does not grow. Without growth, joblessness, poverty and inequality are made worse. Hiking VAT hits the poor the hardest. Equality is a Group of 20 goal this year.

It is accordingly to be hoped that the absence of business confidence and fresh investment will be addressed in the March version of the budget. These two absences are, at least in part, attributable to the low ranking of SA on the Transparency International corruption perception index; our ranking has never been lower. Only those who are the least risk averse are prepared to invest in a corrupt country. Every country sliding lower in the ratings (towards failed statehood) has ever more difficulty growing its economy.

The VAT increase would enrich the fiscus by an estimated R60bn a year, a drop in the ocean compared with the extent of the looting of the public purse in recent years, often estimated in trillions. It accordingly behoves the government, as a business confidence booster, to accelerate the adoption of the DA’s two bills aimed at establishing and enabling a new chapter 9 Anti-Corruption Commission.

Meanwhile, the president should urgently instruct the Special Investigating Unit (SIU) to rake back the loot of state capture (which is still ongoing according to those who know) in civil proceedings anywhere in the world where the loot is found using the services of pro bono attorneys and counsel who worked at the Zondo commission.

The puny efforts of the broken criminal justice administration have in the past recovered more than R10bn from looters. The SIU need only prove its cases against the looters on a balance of probabilities and should surpass the net worth of increased VAT receipts easily. The knock-on effect of increased business confidence, after the reforms and actions suggested above kick in, will be immeasurably good for SA.

Paul Hoffman
Director, Accountability Now