Treasury's planned 2% VAT hike is 'idiotic' - Duma Gqubule, Economist

702's Bongani Bingwa is joined by Duma Gqubule, an economist and research associate at the Social Policy Initiative.

Listen below:

It wasn't a move too many political pundits or economists had predicted - the shock announcement on Wednesday of the postponement of Finance Minister Enoch Godongwana's Budget Speech.

At the thirteenth hour, Godongwana told a media briefing the rescheduling to 12 March is needed 'to allow for further deliberations on the Budget'.

It's a delay seen as a significant challenge for the Government of National Unity (GNU), which has faced increasing scrutiny amid various spats between coalition members since it was formed last year.

However, the Democratic Alliance (DA) labels the postponement as a victory.

It was said to be unhappy with the intention to hike the VAT rate by two percentage points.

Gqubule was one of those who believed the budget would be cancelled yesterday.

ALSO READ: Budget speech postponed: ‘The ANC has learned they don’t govern alone’ - DA

"It was just obvious to me that they had not agreed on this 2% VAT increase."

- Duma Gqubule, Economist - Social Policy Initiative

Gqubule says the postponement is a good thing.

"I've been complaining for more than a decade about the incompetence of this Treasury and I hope South Africans will start listening to me... Our GDP per capita is lower than it was in 2007."

- Duma Gqubule, Economist - Social Policy Initiative

"We've had 17 years of declining average living standards and the forecast is for another two years of this pathetic economic performance."

- Duma Gqubule, Economist - Social Policy Initiative

Gqubule is highly critical of the Treasury's planned 2% VAT increase.

"From an economic point of view, this was an idiotic policy, because their own research says they will not raise the R180 billion, because you can't tax the people in a collapsed economy."

- Duma Gqubule, Economist - Social Policy Initiative

ALSO READ: DA says Budget Speech postponement a 'victory' after its opposition to ANC’s VAT increase

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