The DA was quite right to oppose a VAT increase — no-one wants their groceries to cost more. But the party’s obsession with economic growth as a magic bullet to solve all our societal problems is like believing that going to the gym once a month will get you ripped. Sure, it helps, but without a proper plan you’re just spinning your wheels on the treadmill.
To misquote James Carville, Bill Clinton’s political adviser: it’s about inequality, stupid. Yes, economic growth expands the economy, creates jobs and makes everything seem shinier. But let’s be honest — those benefits don’t exactly trickle down like a well-poured draft beer. More often they stay frothy at the top, enriching the already well-off while the poor keep struggling to pay the bills.
If growth alone solved inequality SA wouldn’t have one of the world’s highest Gini coefficients. The problem isn’t just a lack of jobs; it’s the kind of jobs that are available. You can create 1-million new positions, but if they’re all low-paying, precarious gigs you’re just filling the economy with overworked, underpaid people who can barely make ends meet. Unless we aspire to be a nation of burger flippers and delivery drivers, we need to think bigger.
Then there’s the small issue of discrimination, unequal education and lack of access to capital. If economic growth alone could solve these we wouldn’t still be dealing with the same cycles of poverty decades after apartheid. Without policies that level the playing field, the rich just get richer while the poor get … well, another motivational speech about pulling themselves up by their bootstraps.
And let’s not forget social safety nets. Good luck explaining to a hungry child that GDP is up 2%. Investments in education, healthcare and social welfare aren’t “handouts”; they’re the only way to ensure growth benefits more than just the top few.
Since growth alone won’t cut it, what’s the alternative? A wealth tax or, as some might call it, asking the ultra-rich to contribute a little more instead of hoarding wealth like a dragon sitting on gold.
Unlike VAT (which punishes the poor more than the rich), a wealth tax considers all assets, allows deductions for debts, and is levied fairly. It ensures that those who have accumulated vast fortunes contribute a little more, rather than leaving the burden to the middle and lower classes.
The benefits? More funding for essential services — better schools, hospitals, and housing. You know, the basics of a functional society. Less inherited privilege — wealth shouldn’t guarantee generational prosperity while others struggle to break free from poverty — and better economic productivity. A moderate wealth tax could discourage hoarding and redirect capital into actual investments rather than just parking it in offshore accounts.
Of course critics will say: “But what if the wealthy flee to tax havens?” Well, newsflash: many already do. That’s why smart regulation and international co-operation matter. Others will argue: “It’s too hard to value assets like real estate and art.” But if we can track every cent an ordinary worker earns, we can figure out how to fairly assess billionaire wealth.
And no, a moderate wealth tax won’t crash investment. Billionaires will still invest where they can make money; they’ll just have to part with a little more of it.
Instead of squeezing more out of the working and middle classes with higher VAT or income tax hikes, let’s tap into the real reservoirs of wealth. Yes, some elites will grumble, but many of them wouldn’t be happy unless they were paying zero tax.
There are many ways to improve public finances — not least a real focus on corruption — without burdening the poor. But that’s a topic for another day. For now, let’s stop pretending growth alone will save us and start making the economy work for everyone, not just the lucky few.
• Cachalia is a former DA MP and public enterprises spokesperson.
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