what experts say

FINANCE Minister Pravin Gordhan's maiden Budget received mixed reaction from economists yesterday - some praising it while others described it as consumer unfriendly.

lChief economist at Stanlib, Kevin Lings: "The Budget was not particularly consumer friendly. There's some relief for fiscal drag or bracket creep, but this would not result in the consumer going out and spending like crazy.

"Tax relief would have to be closer to R10billion than R6,5billion to have an impact."

Lings noticed a slight shift in trying to grow industry, the economy, employment and labour absorption.

"There is less emphasis on social spending such as education and healthcare and larger discussion around industrial policy, growth and absorption.

"This is appropriate. The minister probably feels most of the tax revenue windfalls have been made and it's now about broadening the tax base.

"I like the way he seems to have endorsed the independence of the Reserve Bank."

lChief economist FNB, Cees Bruggemans: "All in all, an impressive maiden Budget speech.

"In the Budget R3,6billion was set aside for the new industrial policy ... whose centre piece appears to be a resurrection of increased import substitution linked to infrastructure projects.

"An interesting remark was the point that the public sector wage bill has nearly doubled in five years ... and that more moderate increases should be expected in years to come.

"... one is left with the impression that next week will see the start of hefty increases in public sector tariffs and charges, starting with electricity but not limited thereto."

lNational Council Against Smoking: "Predictably, the tax on cigarettes increased by a meagre R1,24 a pack.

"The Finance Minister has obdurately stuck to a policy that keeps tobacco taxes low and so favours the tobacco companies at the expense of public health and government revenues.

"The tax rates on tobacco products in South Africa are amongst the lowest in the world."

lRegional head of research for Africa, Standard Chartered Bank, Razia Khan: "The inflation targeting mandate is being kept in place, with the inflation target unchanged. This will be viewed positively by the market...

"There will be a sense of relief all round that there was no mention of any Tobin tax, no road attempt to discourage inflows into South Africa, markets will also focus on the liberalisation of regulations for banks ... while this is unlikely to mean an immediate rush for the exit and a surge in outflows ... this should be received positively by the market."

Also good news is the revision to the Treasury's estimate of the budget deficit for the year, at 7,3percent it is well below market forecasts of 7,8percent.