answered MoneyMarketing’s questions on this year’s Budget. Here’s what he thinks worked, what didn’t, and what definitely has room for improvement.
What was your overall impression of the Budget?
My overall impression was that there was not much to this budget from a change perspective. It’s not surprising in an election year, where you don’t want to rock the boat. There was an attempt to placate poor with marginal increases in grants and at same time satisfy investor community by showing that debt was under control and would peak in 25/26 at lower level than MTBPS. With weak revenue and growth caused by high inflation and interest rates and low growth, he couldn’t really increase taxes. It’s certainly not a bad budget, but given the need for growth, I think more could have been spent on fixed capital (infrastructure) although private sector entrance into rail and ports is welcomed.
What could have been better?
There’s the need to create more economic growth as weak growth is a major contributor to our current circumstances. That means addressing electricity and logistics infrastructure issues, which appear now to be versed to private sector to help to do through PPPs. (Refer to capital expenditure above.) Secondly, we need a growth mandate that is enabled by a conducive policy environment.
What could have been worse?
He could have extended our borrowing and consequently widened the deficit and increased debt thereby moving further away from fiscal sustainability.
Were there any glaring omissions?
Given the ongoing energy crisis, I would have expected the incentives for rooftop solar to have at least been extended if not increased. The result of last year’s announcement has had significant impact in terms of taking demand off the grid. Further progress could have been made by extending those incentives.
Do consumers have anything to be worried about?
Because no inflationary adjustments were made to tax brackets this year, many working people will consequently end up paying more tax. They also will be impacted by the unadjusted medical aid rebate and higher than inflation adjustment in “sin” taxes. This all means less money available for personal consumption and the continuation of tight economic times.
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