As one prescient writer put it: “beware the stealth taxes”. And that is indeed what happened in the Budget. Minister Gordhan tried to divert our attention by stating that the revenue lost by shifting the personal income tax brackets would be R8bn. However, spending in the next fiscal year will amount to R979bn which is about R80bn more than in the current year. Clearly there is more than a little pothole to fill and pages of itty bitty bites at our pocket were then read out. It is definitely going to cost more to live and it will be very suspicious if the official inflation rate does not climb steadily from here on.
On the expenditure side, pensions and child grants will each consume about 4% of the money that the government wants to spend in 2011. This implies that 2.6m old folk and an astonishing figure of 11m children are expected to qualify for those distributions. Presumably disability grantees and war veterans comprise most of the rest of the much discussed number of 15m welfare beneficiaries. It is interesting that war veterans receive a monthly grant of R1160 which is R20 more than we taxpayers give to pensioners. Both groups will, however, certainly be comparing their meagre 5.5% increase this year with what the politicians and bureaucrats managed to pocket.
An even bigger impact on our living standards is resulting from the waves of violence that are sweeping some of the countries that supply large portions of the world’s oil. Oil prices well above $100 a barrel coupled to a weakening rand will have a severe impact on prices of just about everything. And that will not exclude the share prices which might go in the opposite direction as consumers choke.
The King of Saudi-Arabia thought it prudent to return home from sick leave in a hurry and distribute a precautionary R250bn to keep his approximately 20 million subjects focussed. If our President Zuma were to try that trick it would cost us plenty! Mind you he must have spent a bundle on leopard skins for all of his wives who turned up at the opening of the provincial talking shop in a frankly distasteful display of conservation disdain.
From here in the kingdom, the unfolding chaos about the Gauteng toll roads is both amusing and alarming. Undoubtedly this SANRAL outfit also have plans for the east and south west and once the 66 cents per km starts rolling in, they will be erecting their toll gantries in our sea breezes where they can gently begin to rust.. Can you remember when utilities were near invisible entities that unobtrusively went about their tasks of supplying water, electricity, railways, roads and radio to the nation? One neither knew nor cared who was CEO or chairman Now their boardrooms are battlegrounds never out of the headlines where sticky fingered soldiers serve just long enough to find the keys to the cash box before transferring to the next one..
A last word about the Budget. One fifth of the state’s expenditure goes to education. In 2011 that will amount to R190 bn. That suggests that each of the approximately 20 million pupils, students and other “learners” is costing taxpayers almost R10 000 a year. Whether or not we are getting value for money is a good point from which to start an argument, but it does also display the amazing information provided by the National Treasury Budget Office which so deservedly received the award for the best and most transparent budget in the world.
How about them Lions? Watch that space. Nice start from the Proteas while Formula 1 has been black flagged in Bahrain. The boys who run Kyalami missed a trick there. A lick of paint, sweep the track and a few thousand old tyres and we could have hosted the circus down here on the southern tip.
James Greener
25th February 2011
