BRIAN KANTOR: Only one solution for failing state utilities and squeezed taxpayers
There is much private capital waiting in the wings to invest in struggling enterprises
The 2019/2020 budget proposals essentially have only one objective: they take their cue from the disastrous financial and economic performance of Eskom over the past decade. Averting an Eskom default has required an injection of equity capital of R23bn a year for the next 10 years, if necessary, by SA’s now even more hard-pressed taxpayers. The revenue collected by the central government budget is estimated to increase 9.2%, having grown 7.4% in 2018/2019. Expenditure on a consolidated all-government spending basis, including the extra spent on supporting Eskom’s balance sheet, will be up 9.6% When compared to expected inflation of about 5%, these represent large real increases and a growing burden on taxpayers, given that the economy is predicted to grow a mere 1.5% in 2019. Personal income-tax collections are estimated to increase R55bn or 11% in the next financial year. This increase occurs without an increase in explicit income-tax rates but with bracket creep. Given inflation-l...
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