A (SLIGHTLY TIPSY) TAKE ON SOUTH AFRICA'S BUDGET SPEECH

Now I promise you I am 100% sober writing this, however you might not be for very long. Lets play a drinking game (Happy hour anybody?). Everytime I mention something negative about South Africa's future prospects based on the Budget Speech we'll both take a shot.

 

The annual National Budget Speech by the Minister of Finance, Pravin Gordon took place recently (I found the need to mention that because seemingly South Africans haven't yet recovered from the SONA drama - lets move on guys, get with the programme *sigh*, although if you haven't gotten over it check out my blog post about it here). The proceedings ran quite smoothly - well, apart from EFFs Ndlozi calling a point of order during the vote of thanks to state that "there is no guidance that Mr Zuma gives to the country, he must not be thanked in the name of this parliament or in the name of the people of South Africa". (First shot time! Cash me ousside wid tequila how bow dah?)

"Now the government is trying to make the rich poorer"

 
What stood out to me about this years budget speech was how much of an emphasis was placed on social and economic transformation. Spending on social grants is set to rise from R164.9bn in the 2016/17 financial year to R209.1bn by 2019/20. This, along with the new tax bracket (45% tax rate on incomes above 1.5million), emphasizes the more communist approach which the South African government seems to be heading towards. It is important to note that 95% of wealth is held by 10% of the population - making South Africa one of the most unequal countries in the world in terms of income distribution. It seems that since the governments strategy of making the poor richer hasn't worked, they're now trying to make the rich poorer. This has a strong link to a SOCIALIST economy. As we know, the ruling party, the ANC, has always had a socialist agenda and it seems this is the year to act on that agenda. This might just be a conspiracy theory but it is definitely something worth taking a shot for.

Now if you want all the facts and figures you can either watch the budget speech yourself or find them here. There are a few things I would like to highlight.

• There is a budget deficit (difference between government receipts and spending) of R149bn as well as government debt having risen to R2.2 trillion or 50.7% of GDP. (Something worth taking 2 shots for)
• Tax relief is minimal, with R750 increase in tax threshold and the threshold of property transfer duties going from R750K to R900K, making this a good time for first time homebuyers to enter the market.
• Miscellaneous taxes such as the sugar tax are in the works to be implemented later this year. A 39c per litre increase in fuel taxes will also come into effect (Another round of shots).
• The National Treasury will be actively combatting tax avoidance and eliminating loopholes taken especially by multinational organisations.  
• R240 billion, or 17.5% of the budget will be spent on basic education. While a further R5billion will be added to the R32 billion set aside for higher education, a figure that cements free higher education as a distant dream.

If you've been taking your shots, whether it's tequila, vodka or jagermeister, it's pretty clear that at this point you should be considerably tipsy. As I'm sure you can tell, it's also pretty clear that the coming financial year has bleak prospects for South Africans. To make matters worse your drink will cost around 10% more now thanks to the new alcohol tax. What do you think of the 2017/18 budget speech? Please don't drink and comment.