February will be a veritable Rubicon for SA government

image SA budget 2021

Alex Rose-Innes reports on next month’s budget 


February will once again see the  State of the Nation Address, an indication of  government’s priorities and key policy objectives for the new year, while at the same time, highlighting auditing previous achievements and failures (which we seldom hear about).

After this comes Tito Mboweni’s Budget, outlining  government expenditure or saving objectives for the next three years. The budget also allows  government to introduce additional revenue measures such as increasing taxes to strengthen public finances. And if the latest laugh aloud idea of Communications Minister, Stella Ndabeni-Abrahams could be believed, compulsory taxation for everyone with a smartphone, Netflix streaming, tablet or PC, which would be used to bail out the dying SABC, is on the cards.

Analysts expect tax increases and additional taxes, targeting the rich which is only the top 1% of people in SA who holds more than 30% of the overall wealth in their hands. In  October 2020’s Medium-Term Budget Policy Statement (MTBPS), the government had indicated that another R40 billion in taxes were needed to boost revenue as the country staggers under the cost of the pandemic.

In an in-depth discussion of the budget deficit, Daily Maverick pointed at a shortfall  of 14.6% , much higher than the forecasted 6.4%. The government’s tax revenue would at the very least be R312.8-billion lower than originally budgeted for. The reasons for this are given as   declining personal income tax linked to lockdown job losses and the prohibition on the sale of alcohol and tobacco products, which is costing the government billions of Rand in sin taxes. And all because South Africans cannot contain their behaviour or hold their liquor it seems without a rise in trauma cases as a result of fighting or increased cases of Gender-Based-Violence.

And with vaccine information flying to and fro, it had just come to light that despite the government’s public announcements that it had been in continued talks with AstraZeneca pharma giant, this company cannot supply SA with vaccines and with the help of private medical aids to the amount of R7 billion, it seems the country’s vaccines would be imported from China. We simply cannot afford even the lower prices offered by other country’s pharmaceutical providers.


The public servant wage bill, (SA has more than one million public servants), is predicted to create an even more unstable fiscus with continuing  trade union demands for increases  during a time when the country is literally staggering under a massive international debt burden, the cost of the pandemic and all indications  pointing to further import woes as SA’s  manufacturing ability drops to around 3%.  If the wage bill is not addressed as a matter of urgency, economists predict that the country would show a severe fiscal deficit within the next three years. By then the goose that lays the golden eggs would have been properly killed.



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