This budget will 'strangle the taxpayer'
An increase in the fuel levy and a slide in state finance were among the concerns raised when our sister publication Times Select approached experts for comment on Finance Minister Malusi Gigaba’s budget speech.
Efficient Group chief economist Dawie Roodt
“As expected it was not a good budget. It is strangling the taxpayer and left many questions unanswered including the issue of state-owned enterprises. The minister talked about strengthening the Eskom balance sheet. But what does that mean? Not enough was done to cut spending. The slide in state finance has not been halted and state debt will reach record lows in the next few years‚ which will lead to a ratings downgrade. I understand the grant increase‚ which was probably done to balance the VAT increase.”
Economist Thabi Leoka “I was satisfied overall with the budget by the minister‚ but as they say the proof is in the pudding. I’m glad about the one percentage point increase in VAT‚ which I think was necessary because of the huge GDP shortfall and bad debt deficit. People need to understand that [raising VAT] is not always regressive.
“It widens the number of food products that are zero-rated‚ which protects the poor. The lack of detail in stimulating economic growth was a concern and there was no mention on the minimum wage and how it would affect expenditure. The minister also failed to mention any changes in the size of cabinet and what effect that would have.”
For more on this article‚ go to Times Select.
Finance Minister Malusi Gigaba delivered his annual budget speech in Parliament on February 21 2018. Here are the highlights.