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The 2018 budget has snatched SA from the jaws of a debt trap, almost certainly averted an imminent credit rating downgrade from Moody’s and cemented the foundations of the country’s newly established economic recovery.
The bad news is that all taxpayers will pay for the profligacy of the Zuma years through higher taxes, including a hike in Vat to 15%. But the good news is that the reduction in fiscal risk should fuel confidence and, hopefully, growth.
"This is a tough but hopeful budget," said finance minister Malusi Gigaba in his speech. "Acting now to strengthen the fiscal position will improve the outlook for the economy and increase space for future investment growth."
The first order of business was to correct the impression created by his medium-term budget in October that government had relinquished its commitment to fiscal discipline.
Instead, the 2018 budget accelerates fiscal consolidation, while accommodating a promised rollout of free higher education over the next three...
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