If the medium-term budget policy statement does nothing else, it brings home in a bruising way the parlous state of public finances. Almost every major key indicator has had to be revised in the wrong direction: economic growth has been revised down, debt is heading higher, the deficit has risen, spending has had to be curtailed and revenue is down. It has often been said that SA’s fiscal position is “on the brink” or “teetering” or “in danger”. The policy statement makes it clear that this phraseology is now defunct. The brink is here. The one theoretical bright spot did not turn out to be a bright spot at all. Analysts and economists were impressed with tax receipts so far in 2018 and were extrapolating a revenue overrun of R11bn for the full year after revenue collection for the first six months of 2018-2019 grew 10.7% from the same period in 2017. The policy statement squashed this idea flat. The reason for the seeming high level of tax receipts is simply that VAT refunds have b...

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