Related Articles
Top Stories
Feb 13 2012 12:15
Miner Xstrata says it has brought forward maintenance on two furnaces to assist Eskom to save power.
Feb 13 2012 10:43
Although jobs were created, the economy is still 420 000 jobs short of the peak employment level before the 2009 global financial crisis, says Adcorp.
Feb 13 2012 07:58
Greek lawmakers have approved a new round of drastic austerity measures after a long day of street battles between police and protesters left dozens injured.
Johannesburg - The budget deficit, job creation and the Reserve Bank's mandate are three subjects that Minister of Finance Pravin Gordhan will be unable to ignore in Wednesday's budget speech.
The deficit, which is expected to run to almost 7.8% of the country's gross domestic product in the current financial year, has almost doubled since last year's budget speech, owing to Treasury's efforts to carry the country through last year's economic crisis.
However, this is now a major headache because it has given rise to questions about the quality of the budget and the effectiveness of government spending.
The budget deficit is the most important challenge for the Minister of Finance, reckons KPMG senior economist Frank Blackmore.
More now needs to be extracted from a relatively small group of taxpayers who are already being very efficiently tapped by the South African Revenue Service (SARS), he says.
This tapping includes diminishing corporate tax and the VAT base, he explains. This sort of revenue is becoming increasingly restricted because consumers are still wary of spending.
Brisker economic growth could help increase revenue from company tax and VAT, and is also necessary for job creation after a million jobs were lost last year.
According to Fedusa general secretary Dennis George, unemployment and the resulting poverty form South Africa's most urgent socio-economic problem.
Fedusa reckons government should create 500 000 jobs through the private sector - not including the 300 000 decent jobs created by the expanded public works programme.
Following discussions on the Reserve Bank's mandate to maintain an inflation target of between 3% and 6% that began late last year, the general expectation is that Gordhan will comment on the target.
The 2000 budget speech contained the first reference to the inflation target, recalls Razia Khan, an economist at Standard Chartered in London.
A decade later it is also fitting for any change reflecting South Africa's altered circumstances to be announced in the budget speech.
According to Khan it's not clear whether this would be a change to the target itself - for example 4% to 7% instead of 3% to 6% - or a wider adjustment to the Reserve Bank's mandate to bring economic growth and job creation into the equation.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.