Thoughts on South African and international politics and culture

Thursday, February 24, 2005

Trevor's Gold Star
On the whole, I was very impressed with Manuel's budget outlined yesterday. I was particularly happy with both the tax relief (more on the preferential tax regimes than the corporate tax rate) and red tape reduction for small businesses, which has to assist the economic engine of the economy (and myself!). Some tax relief for the individual, however small, was welcome and reflects the continually enhanced methods of tax collection in South Africa. It is definitely a budget for growth, although the increased spending in education is something which is always pleasing to see. Some teacher's unions have been doing the talk radio rounds this morning, saying that those increases in education spending were merely pay raises negotiated late last year, so perhaps we haven't heard the end of that.

And what of the misses? Pensions, although raised by some R40 a month, could have seen a greater increase. For those living on the poverty line in their old age, R780 is not much to get by on. Some have extolled the lack of interest in social grants, but in my view, social grants are wasteful, growth-hampering spending anyway. Finally, some were hopefully anticipating some form of exchange control relaxation, but this was not to be.

All in all, a rather unsurprising and straight-forward budget, and what a luxury that is in South Africa. A growing economy held together by tight macro-economic policies, now bearing fruit for the majority of South Africans. Congratulations Trevor Manuel.