Last week’s Budget was not as scary as we all thought it would be. Most of us always pay close attention to the tax changes and this time we actually got some reprieve on the personal income tax side; but we will once again have to pay more tax on tobacco, alcohol and fuel. By now, we have learned to take whatever government says with a pinch of salt. They always have good plans but the implementation usually falls short.
It must be said that in a country like South Africa the situation can be compared to two opposite parties fighting it out. On the one side you have Treasury with a bunch of very bright people trying to steer the ship towards developed-country prudence and capitalist ways; and on the other side you have the trade unions and populist agenda trying to get as much as they can for their own benefit, regardless of the consequences. The ANC government is the arbiter and has to balance the situation. Unfortunately for the capitalist side, the populist side has more votes and the government knows this.
So what we saw in this Budget is that the government is trying to strike a better balance by addressing the spending side, but at the same time giving SARS just over R3 billion to improve the collection side. It is clear that we are very close to the edge but the ship is turning. Going forward we have to realize that patching our own life raft is very important so that we can stay afloat, but we are merely a speck on the ocean of the world economy and will always be subject to its will.
