10 Things we expect to happen at the budget speech tomorrow
1. Increases in social welfare spending. Sadly a small portion of SA's population is carrying a very large portion of its population. Small number of tax payers, massive number of grant receivers.
2. Increase in Personal income taxes. Government needs more money. Easiest way is to keep milking the cow its been milking for years.
3. Increase in Fuel levy. Easy money, and they need funds to cover the massive loss making E-tolls
4. Increase in "Sin taxes". We will see massive spikes in taxes on alcohol and tobacco. Demand is pretty inelastic. Thus not affected much by increases in prices or taxes.
5. Increase in Company tax rates. Slight chance of this. As companies are already struggling. Taxing them more might lead to job losses as firms cut back to curb expenses.
6. Increased spending allocated to Department of Higher education after the fees must fall campaign. And fact that our spending on tertiary education is disproportionately low when compared to basic education
7. Transfer duties on properties will increase, as will the value of properties exempt from paying these transfer duties.
8. Government salaries will be capped to try and curb the ever increasing state salary bill. Or increases will be capped at a certain amount with no room for maneuvering regardless of what unions are demanding.
9. Announcing the privatization of certain parts of some government parastatals.
10. Increased incentives for citizens to save. Tax free investment amounts will be bumped up, in order to get more people to save as South Africa has an extremely poor savings rate. See our Economics blog for more on this
And then what we would love to see but chances of it happening being very very slim.
2. Increase in Personal income taxes. Government needs more money. Easiest way is to keep milking the cow its been milking for years.
3. Increase in Fuel levy. Easy money, and they need funds to cover the massive loss making E-tolls
4. Increase in "Sin taxes". We will see massive spikes in taxes on alcohol and tobacco. Demand is pretty inelastic. Thus not affected much by increases in prices or taxes.
5. Increase in Company tax rates. Slight chance of this. As companies are already struggling. Taxing them more might lead to job losses as firms cut back to curb expenses.
6. Increased spending allocated to Department of Higher education after the fees must fall campaign. And fact that our spending on tertiary education is disproportionately low when compared to basic education
7. Transfer duties on properties will increase, as will the value of properties exempt from paying these transfer duties.
8. Government salaries will be capped to try and curb the ever increasing state salary bill. Or increases will be capped at a certain amount with no room for maneuvering regardless of what unions are demanding.
9. Announcing the privatization of certain parts of some government parastatals.
10. Increased incentives for citizens to save. Tax free investment amounts will be bumped up, in order to get more people to save as South Africa has an extremely poor savings rate. See our Economics blog for more on this
And then what we would love to see but chances of it happening being very very slim.
- Scrapping E-tolls. Its a money pit and government is wasting endless amounts of money
- Value Added Tax (VAT) rate increased from 14% to 16% (while making more essential goods VAT exempt to compensate the poor)
