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Budget must counteract energy crisis through tax incentives

South Africa's 2023 Budget should not only address Eskom's dire financial position and debt, but must also implement a holistic framework and systems to counteract the damage caused by load shedding.

The fiscal framework, which forms part of the budget, must provide relief through tax incentives to help businesses and households survive and stimulate the economy.

Although the budget deficit keeps increasing, it is still important to grow the economy and create more jobs. It will increase the tax base and improve the country's fiscal position.

Tax hikes, on the other hand, will be extremely short-sighted and counter-productive for economic growth.

Proper incentives and tax discounts must be provided to households to enable the public to convert to renewable energy sources.

It will, on the one hand, reduce their dependence on the Eskom grid and on the other hand, contribute to the national power pool while simultaneously promoting green power generation.

Other countries, like Vietnam and India, achieved great success by offering the public the incentives they needed to convert to solar power.

The Income Tax Act does make provision for rebates for businesses, which may write off renewable energy assets against tax.

This is, however, limited to commercial enterprises and must be extended to all households with the necessary tax rebates for the costs involved.

Apart from the power crisis, government's wage bill is also a serious problem. At present, the public service is too large and too expensive to afford. It is out of control and unsustainable.

Last year's provision for increases in the medium-term budget is unrealistic, while pressure from trade unions keep mounting and government's coffers are empty.

This problem has been pointed out year after year and it is time to find a sustainable solution.

Government, however, seems to be doing the opposite of what it should as it recently created yet another position for a Minister of Electricity.

The budget must be realistic and not underestimate or disregard the most crucial expenses. That is what happened last year and it simply exacerbated the crisis, because those expenses cannot be wished away.

All luxuries must be cut from the budget. Departments must not be given more money to squander. Every single cent must be used to stimulate the economy, grow businesses and create jobs.

Spending on basic service delivery and infrastructure forms part of those unavoidable expenses and serves as a basis for economic growth.

The long-awaited structural reform of policy and removal of red tape must realise to create a healthy business environment.

Constant lifelines to public enterprises have become a heavy burden on taxpayers. So, the luxury of providing more aid to incompetent, corrupt enterprises no longer exist.

Most of these enterprises are no more than failed ANC-ideological projects and a source of cadre enrichment. Many are no longer viable and must be abolished, or privatised at the very least.

The situation at the SAA must be clarified. Government's involvement there and what exactly the sale of the majority share entails remain unclear.

Another lifeline must certainly not be extended to this bottomless pit. It will in no way contribute to building the country's economy.

Tax money should be used to benefit taxpayers and stimulate economic growth, not to promote ANC ideology or enrich cadres.

Minister Enoch Godongwana must take the harsh reality of the country's dire situation into account along with the real possibility that this may very well be the penultimate Budget Speech delivered by an ANC minister in South Africa.

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