The 2017 budget: tough economic times require tough decisions
Jannie Rossouw, the head of Wits’s school of economic and business sciences, on the critical issues that must be addressed in the upcoming budget
SA’s 2017-18 budget will have to be bold to pull the country out of the prevailing economic crisis. Economic growth has stalled and the threat of a credit rating downgrade still looms large. The Conversation Africa’s business and economy editor, Sibonelo Radebe, asked the head of University of the Witwatersrand’s school of economic and business sciences, Jannie Rossouw, to tease out critical issues that must be addressed in the upcoming budget. SIBONELO RADEBE: What should South Africans expect from the 2017 budget speech? JANNIE ROSSOUW: Finance Minister Pravin Gordhan, made it clear in last year’s medium-term budget policy statement that tax increases would be needed to ensure that government revenue rises by R28bn for the 2017-18 tax year. As SA is currently suffering very low economic growth, this additional income can only be raised by higher taxes and through bracket creep as a result of inflation. Bracket creep happens when taxpayers’ income increases as a result of inflation...
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