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Mini budget in a nutshell

Finance minister Tito Mboweni delivers his maiden MTBPS.

What the numbers reveal

  • Economic growth revised downwards from 1.5% to 0.7% for 2018.
  • Consolidated budget deficit for 2018/19 revised to 4% of GDP (from 3.6%).
  • After rising to 4.2% of GDP in 2019/20, it is expected to stabilise at 4% in outer years.
  • Gross debt to stabilise at 59.6% of GDP in 2023/24 (February budget projection was 56.2% of GDP in 2021/22).
  • Tax revenue for 2018/19 projected to fall R27.4 billion short of February estimate due to Vat refund backlog, underestimation of refunds and slower corporate income tax collections.
  • Expenditure ceiling to be maintained and set to grow at 1.5% in 2021/22.

Read: Not a cross-road but a wholesale U-turn

Tax outlook

  • No increases in personal income or corporates income tax rates or Vat expected, but personal income tax brackets, levies and excise duties to be adjusted for inflation.
  • White bread flour, cake flour and sanitary pads to be zero-rated from April 1, 2019 at an estimated cost of R1.2 billion. 
  • Reforms under way at Sars to regularise Vat refund payments and rebuild capacity (reprioritisation of R1.4 billion of budget).
  • Implementation of carbon tax postponed from January 1 to June 1, 2019.
  • The Road Accident Fund will require further large increases to the fuel levy in each of the next three years. 

Read: What your tax bill will look like next year

Read: These are the items that will be zero-rated 

Expenditure

  • Public service wage agreement exceeds budgeted baselines by R30.2 billion over medium term. No additional money allocated, national and provincial departments to absorb costs within compensation baselines.
  • Around 85% of increase in wage bill due to higher wages, rather than higher head count.
  • SAA to receive R5 billion through special appropriation bill to settle debt redeeming between now and March 2019. This will help prevent call on airline’s outstanding government-debt of R16.4 billion.
  • SA Post Office receives R2.9 billion to reduce debt levels.
  • Sanral receives R5.8 billion to compensate for non-payment of e-tolls, of which R3 billion is an additional allocation.
  • Reprioritisation of R350 million to recruit more than 2 000 health professionals into public health facilities.

Read: Bailouts for SAA, Sanral’s e-tolls and more 

Read: Move to improve infrastructure project outcomes 

Mboweni comments

  • Minister says reconfiguration of SOEs required; parties should be “open-minded” and consider equity partner or close of certain business activities in SAA stable.
  • New way of thinking required regarding public sector wage bill. Represents about 36% of budget, “sweet spot” is below 30%; public officials must also show restraint.
  • Size of cabinet the prerogative of president, but should preferably not be more than 25, probably 20.
  • Beneficial to involve private partners in health sector.
  • Stabilisation of gross debt-to-GDP ratio close to 60% not a good development, “sweet spot” is below 50%.

Read the complete MTBPS

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COMMENTS   14

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Aluta Continua ! #MakeSouthAfricaGreatAgain

A-loota continua. Proudly brought to you by VBS

“Let them eat cake” it’s Vat free…

Disappointing as usual. No bailouts for regime companies and many should be sacked!

JSE ALSI up 0,46% to 51405.19, will probaply fall to around 50,042 or lower in a few days.

JSE ALSI already down -0.57% to 50877 on it’s way sub 50th

Much like the Evening Specials menu on the Titanic. Soon to be drowned and very much irrelevant

Brilliant!
Tax collections understated and getting worse as:
1. VAT refunds overdue
2. Companies not profitable-look at Novus today( Mtn etc)
3. Due to 2, staff will be sacked so less personal tax
4. Clever high income earners running away.
5. Property transactions down so less transfer duty
6. Growth is close to a recession and less GDP per capita what with half of Nigeria and Zimbabwe having invaded us.

This needs to be investigated…

Around 85% of increase in wage bill due to higher wages, rather than higher head count.

WTF?

Sweet spot for public wage bill is below 14%..

Yes the RAF — always broke. Badly managed. Doesnt properly fulfill its stated function (how many people receive payment due? How long must they wait?. Open for abuse. Ripe target for fraud and corruption.
In short it is broken and useless and expensive.
And currently adds R1.93 to each litre of fuel.

Dissolve the RAF would drop the fuel price. Make car insurance mandatory by law (australia does this), and let the insurers sort out fraud claims and the like.
And with the currently uninsured three quarters of uninsured vehicles forced to take out insurance, the pool is much bigger so premiums can likely become more affordable not to mention that conscientious drivers are rewarded with lower premiums while the likes of taxi drivers will have to deservedly pay through their a-holes.

This makes more sense to me than a useless govt wet dream that adds an extra driver to fuel prices for zero value added.

Dissolving the RAF is a good idea, but will not be implimented. Can you imagine the chaos when these taxi owners, divers are their associations embark on a protest?? “Power to the people” has gone much to far and is one of the biggest problems in SA.

So the e-toll defaulters are paying SANRAL indirectly anyway.

Check out the utter astonishment of Melanie Verwoerd, one of Ramaphosa’s greatest praise singers, at the revelation that overseas investors refuse to invest in such a violent and corrupt country.

Then it is clear that nothing will change for the better under this administration.

Its policy remains that wealth (acquired by by fair means or foul) equals dignity even though citizens’ main priority is employment.

The president is clearly hamstrung by the “bad ANC” but the faith put by many in his long game approach is misguided.

We are told that once he has a clear mandate after next year’s election he will do something. A clear mandate for what? And how, with the same top six and NEC and Julius Malema always behind his shoulder?

Rahamphosa will be out by the next election. Our next president will be ACE.

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