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Mboweni, the budget and a dwindling, disengaged audience

2020-02-24 16:17

The jury is still out on whether South Africans will be watching, and will be engaged with, this week’s budget speech.

If the numbers from last year are anything to go by, Finance Minister Tito Mboweni may not have the captive audience he needs on Wednesday.

According to leading South African marketing and social research consultancy Citizen Surveys, just over half (54%) of all South African adults aged 18 years and older watched, listened to, or were aware of his February 2019 budget speech.

This number dropped significantly, to 36%, when it came to his mid-term budget speech.

Mboweni’s 2020 budget speech has widely been described as one of the toughest ones yet, and the announcement of how the government plans to spend its dwindling budget and collect more revenue in an extremely tight economic environment is not going to be an easy one to hear.

Reza Omar, strategic research director at Citizen Surveys, said that last year just over half of South Africans who were aware of the budget speech said that it had a positive effect on their views of the country’s direction, but the mid-term budget speech had a muted effect: more people said it had no effect on them (40%).

“After the mid-term budget speech only 44% of South Africans felt positive about the direction in which the country was heading, which was significantly lower than the effect seen in February (53%),” Omar said.

“That said, it did not increase the number of South Africans who felt negative; instead, those who said that it had no effect grew by 10%.

In fact, the proportion of those who said that it had a negative effect dropped by 1%, which helps to explain Mboweni’s favourability rating reaching 33% at the end of 2019 – the second highest among all political leaders measured.”

A critical element of the budget will be solutions to the challenges faced by the country, many of which involve the widespread historical and present corruption that is being exposed.

In the last quarter of 2019, the South African Citizens Survey by Citizen Surveys found that about three-quarters (74%) of South Africans believed that corruption in South Africa was on the increase.

Sars

Trust in the South African Revenue Service was at its highest point (62%) in the first quarter of 2018, when President Cyril Ramaphosa took office and committed to bringing the perpetrators of state capture to task.

However, by the third quarter of 2018, trust in Sars dropped to a low point of 54%, corresponding with the commissions of inquiry into state capture and their exposure of the depth of the problem.

When Sars confirmed that it intended to investigate the tax evasion claims arising from the Zondo Commission, trust improved.

However, as no significant action was taken subsequent to last year’s general elections, trust in the revenue service dropped again, ending the year at 57%.

Tax

Between January 2018 and July 2019, the South African Citizens Survey asked 20 800 people if they thought that withholding the payment of tax was a legitimate form of protest.

By July 2019, less than two in three South Africans (64%) believed that it was wrong to evade or avoid paying tax and that such people should be punished under the law.

This was 10% lower than at the high of Ramaphoria in February 2018.

“The financing of unnecessary and wasteful state expenditure, corruption, and state capture are a strong disincentive for paying taxes,” said Omar.

“This helps to explain why one-third (33%) of South Africans sympathise or believe that there is nothing wrong with not paying tax. Citizens who do not trust Sars are far more likely to believe that it is acceptable not to pay tax”.

At this year’s state of the nation address, Ramaphosa reaffirmed his commitment to tackling the perpetrators of state capture.

“This is a necessary step in helping to rebuild trust in Sars, and thereby improving the government’s ability to improve tax collection,” concludes Omar.

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March 29 2020