Budget: Living dangerously
There are significant risks building in SA’s fiscal system but apart from a Vat hike, SA’s fiscal cupboard is practically bare
For every economist who thinks Pravin Gordhan is doing a great job holding the line on fiscal discipline there are two who fear he is not doing enough to safeguard SA’s public finances from the build-up of risks given the low-growth trap the economy is mired in. Political and trends analyst JP Landman is in the former camp. He points out that since 2013, national treasury has bettered its self-imposed expenditure ceiling every year. “This demolishes the political myths that treasury does not have the ability to hold the line on expenditure and that populist demands from politicians undermine treasury’s management,” he says. “I’m not suggesting for a moment it’s not a titanic fight or that treasury doesn’t have to work hard to hold its corner, but the evidence suggests that it is very successful at the effort, contrary to what the mythmakers say.” Sanlam Investment’s Arthur Kamp is equally generous, arguing that some of the key building blocks to return SA to fiscal sustainability ar...
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