POLITICS LIVE: Two graphs that show how Zumanomics is trashing the budget
'Instead of tailoring spending to account for decreased revenue, spending was unleashed in a way that would have been unthinkable under previous administrations'
There's a lot of pre-budget speculation that hits my inbox at this time of year, much of it ignorable commentary laced with corporate self-promotion. What caught my eye were two graphs in an article by Dave Mohr and Izak Odendaal of Old Mutual Multi-Managers. I am by no means acquainted with the black arts of economics, but these two charts are an arresting description of how South Africa got it right and then got it wrong again between 1999 and the present. The first (Chart 1 below) illustrates how government expenditure has grown, leaving growth in tax revenue in a never-ending battle to catch up since President Jacob Zuma became president in 2009. The graph clearly shows that, under former president Thabo Mbeki, expenditure was managed while tax revenue improved fairly dramatically, to the point where revenue actually exceeded expenditure for a brief spell centred on 2008. Then came the Zuma era. Granted, global economic conditions changed for the worse. But, instead of tailoring...
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