Middle class will be milked again

Finance Minister Malusi Gigaba’s mediumterm budget speech in parliament this week was all about sketching the next few years ahead for the economy and government’s finances. Gigaba did not refer to, or impose, any new tax hikes, nor was he expected to, because this budget speech was about a broad assessment and policy.

So, some of us may have believed we dodged a bullet. It looks as though we’re going to at least have as comfortable a festive season as we could have expected, given that the economy is close to being a basket case.

December will not be sullied by the pain of having to dig deeper into our pockets to keep the government stumbling along.

But the minister’s ominous portrayal of our parlous financial state as a country should leave us in no doubt that there is pain coming down the line. And we will feel that pain acutely in our pockets. Gigaba has no option but to administer unpalatable fiscal medicine – and that could be in his main budget in February next year.

There is a revenue shortfall of more than R50 billion, which is predicted to balloon over the next three years.

The money has to be found somewhere – and the only way to do that is by milking the long-suffering middle class once again.

We say middle class deliberately because the rich are usually unaffected by government revenue demands and the poor don’t have the money anyway.

Gigaba has limited options: he can increase value-added tax, which would be political suicide for the ANC, he could increase the rate of employee tax and he could hike the fuel levy, as well as the sin taxes on alcohol and tobacco.

Whichever way he jumps, it looks like being a particularly Unhappy New Year for ordinary people …