THE BIG PICTURE: BUDGET 2017
Praise for Pravin, but things are looking bleak for the economy
Only faster economic growthcan take the pressure off SA’sstrained public finances andoverburdened taxpayers
SA’s lethargic growth rate has placed immense pressure on the country’s public finances, resulting in a R30bn revenue shortfall that has forced treasury to double down on measures to curb the build-up of debt. The past year is the first since 2009/2010 that tax revenues have not kept pace with economic growth. This has created a huge hole in the budget and cast a cloud over the future pace of revenue collection. But such is the esteem in which finance minister Pravin Gordhan is held that he received a standing ovation before and after delivering his budget speech in parliament. Praise even came from opposite sides of the ideological divide. Julius Malema’s EFF loved Gordhan’s message of economic transformation, while the rating agencies were comforted by the budget’s adherence to fiscal discipline. But all the cheering should not distract from the fact that the 2017 budget reveals just how fiscally constrained SA has become. Most alarming is that the buoyancy of tax revenue (its res...
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