from DION HENRICK in Cape Town
Cape Town Bureau
CAPE TOWN, (CAJ News) – SOUTH Africa estimates tax revenues of R1,55 trillion (US$103, 1 billion) for 2021/02.
This is according to Finance Minister, Enoch Godongwana, as he presented his Budget Speech in Parliament on Wednesday.
The minister noted this was R62 billion higher than estimates from four months ago, and R182 billion higher than estimates from last year’s Budget.
This follows a shortfall of R176 billion for 2020/21 when compared to the 2020 Budget forecasts, he added.
Godongwana attributed the “positive surprise” to the mining sector due to higher commodity prices.
“Madam Speaker, one swallow does not make a summer,” he said.
The minister added improved revenue performance was not a reflection of an improvement in the capacity of the South African economy.
It is reeling from the outbreak of the COVID-19 in 2020.
“As such, we cannot plan permanent expenditure on the basis of short-term increases in commodity prices,” Godongwana said.
The minister projected the country’s real Gross Domestic Product (GDP) to grow by an average of 2,1 percent in 2022.
Nonetheless, GDP is expected to grow by an average of 1,8 percent over a three-year period.
Headline inflation is projected at 4,8 percent in 2022 and 4,4 percent in 2023.
Meanwhile, there are worrying prospects over the government debt.
It has reached R4,3 trillion and is projected to rise to R5,4 trillion over the medium-term.
Among other highlights, R76 billion is allocated for job creation programmes.
Over the next three years, government will allocate R3,33 trillion to the social wage to support vulnerable and low-income households.
Government will add R24,6 billion for provincial education departments to address the shortfalls in the compensation of teachers.
Over the next three years, President Cyril Ramaphosa will allocate R3,33 trillion to the social wage to support vulnerable and low-income households.
The opposition Democratic Alliance (DA) said the budget speech offered a welcome but cautious narrative on the state of South Africa’s fiscal trajectory.
“The DA is, however, concerned that he did not go far enough to address the elephant in the room,” said Dion George, Shadow Minister of Finance.
These issues are the public sector wage bill, escalating costs of the national debt and state of parastatals.
– CAJ News