Addressing a conference on small business in 1986 Ronald Reagan said, “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it”. That sentiment ran through much of last week’s budget speech and explains why we have not gone along with the many analyses appearing in the media that the Minister of Finance did well to deliver a considered budget in the best interests of the economy and the people of South Africa. Our read is very different. Government expenditure now accounts for more than 30% of GDP. Our data extends back to the 1960s, and, until 2013/14, expenditure had never breached the 30% level. Even as the economy was collapsing around the ears of the National Party government in the 1980s, expenditure levels only twice exceeded 26% of GDP. Revenue is projected to breach the 30% mark in 2019/20 for the first time on record. In the mid-2000s, when the economy grew most s...

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