There is little Treasury can do to avoid further deterioration in budget deficit
SA’s fiscal challenges are underpinned by a downward trend in revenue collection and an over-reliance on borrowing
Finance minister Tito Mboweni is set to deliver the 2019 budget on Wednesday against the backdrop of an economy characterised by prolonged underperformance and a social context underscored by growing discontent. These are likely to be exacerbated by the increased risks in the global environment — slower growth, Brexit, trade tension and climate change. Combined, these factors have manifested in acute challenges that threaten to undermine the current path of fiscal consolidation and, by implication, the broader economy. It necessitates a change in direction. As such, politically difficult choices appear unavoidable, even in the run-up to a general election. Business Unity SA has identified three of the most pressing themes that should form part of the budget: addressing the urgent governance, financial and operational challenges in state-owned entities (SOEs), in particular Eskom; declining tax revenue; and pursuing pro-growth policies. The latter emerged during Mboweni’s maiden medi...
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