BUDGET 2018
HILARY JOFFE: Savage fiscal consolidation comes as a legacy of Zuma’s poison pills
The first budget of the Ramaphosa administration was presented on Wednesday by a finance minister who was a poster child of the Zuma administration — and it highlighted the paradox at the heart of the speech. On the one hand, Cyril Ramaphosa’s ascent to the presidency holds out the prospect that SA will make the changes needed to alter its economic course, a prospect that has already boosted confidence and lifted growth forecasts off their earlier lows, making the budget ratios look somewhat better. Arguably, too, the fact that there is now an administration in place that has political legitimacy – and Ramaphosa’s renowned negotiating skills – made it possible to opt for budgetary choices such as hiking the value-added tax (VAT) rate, which Treasury officials had previously feared because of the popular protest they might trigger. On the other hand, this first budget of the new administration was all but crippled by the sins of the old. This was the budget that had to deal with the ...
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