BUDGET FORECASTS
Pravin Gordhan will be checking sofa for coins
The finance minister can’t keep kicking the can down the road — only higher growth rates offer any sustainable solution to the revenue problem, writes Hilary Joffe
With just under a month to go until budget day on February 22, the tax community is powering up its collective crystal ball to try to predict where Finance Minister Pravin Gordhan will find the money he needs to keep the ratings agencies off his back. Not that the need for SA to start reining in the public debt is just about the ratings agencies. The more money the government has to borrow now to finance the gap between what it spends and what it collects in tax revenue, the more it burdens current and future generations with the need to pay back the money. As it is, debt levels have been rising faster than the economy has been growing and the interest on the public debt is the fastest-rising item of government spending. The Treasury has been promising for a while to cap the public debt level, but it has proved to be a challenge in an environment in which economic growth and, therefore, tax revenue have fallen short of budget targets, while the political will to cut spending is limi...
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