|In 20 years of reading budget speeches, this was the thinnest, scariest, and most riddled with intrigue budget that I’ve seen in a very long time. It is not necessarily only what was said in the budget speech that is relevant, you also need to understand what was not said, and in what tone some of the statements were delivered.
Let’s be honest we are in dire straits in this country, we have an increasing and ever ballooning national debt, that contrary to statements made in the budget speech is being reckoned by independent economists to be closer to R3.5 trillion than the disclosed R2 trillion. The question therefore arises can we ever repay the debt. The budget speech in itself was aligned to the SONA. This SONA had a very specific direction in terms of a long-term direction to return the country to economic prosperity and to the land of sugarplum fairies. Our eccentric minister of finance contrasted of the image of succulent plums with an Aloe’ plant. Quite rightly so I would imagine as we are but all Aloe’s and we will have to withstand the drought that is about to come. In as far as tax reforms are concerned there were no material adjustments. It could have been worse in the CGT inclusion rates could have been increased, and dividends tax could have increased for domestically declared dividends. However this did not transpire! Is it because of the budget? is it because of the upcoming election? Or might it be that someone in National Treasury realised that 3.7% of the population effectively contribute close to R1trillion to the total tax collection?
If this 3.7% of the individual taxpayers were to go on a no pay no play basis, the stated R556 billion collected from individual taxpayers would be reduced by approximately 80%.
The ANC since 1994 and made it clear that they want to correct the wrongs of the past, and they will take control of the country and the state owned assets and that they will endeavour to make good on the promises to build a better country for. Strangely enough in the last 24 months we have heard vehement calls for expropriation without compensation, nationalisations of assets and radical economic transformation. Yet the Minister of Finance stood up and said we need to take a closer look at the state owned enterprises. Do we need them, and if we do are they profitable and effective and efficient? Is this the a potential rift in the economic views of the governing party? How do you reconcile nationalisation with the sale of state-owned enterprises to the private sector? How do you reconcile nationalisation with a call for the inclusion of the private sector in joint projects like construction, public-private partnerships, joint funds funding institutions and banks? These are all questions that came out of the budget speech that are perplexing, and I am battling to connect the dots between what was said and what is being said. Do we have a 360 on Nationalisation? The question therefore remains how all this will pan out and what effect will this have on the election?
So… What does the budget mean for me and you in our day-to-day lives?
Well we will pay more for fuel, (current fuels that are not taxed will be taxed), if you drink whiskey you will pay more substantially more, beer wine and sparkling wine will cost you more, as will your cigars or cigarettes, oh and your favourite sugar loaded beverages will cost you more too. Considering the effect of inflation and the increase in the sintax and levies, we are going to pay a lot more. Oh and I forgot to mention that in the event that you get an increase this year that you are more than likely to move into a higher tax bracket which means you will inadvertently pay more tax?