Later today, finance minister Tito Mboweni will announce the 2021/2022 budget and pundits are speculating on what the minister will do to rebalance the books.
The cost of the global pandemic has hit every country hard but the developing nations have been hit disproportionately. The economy was not doing too well before Covid-19 hit our shores, but the cost of the virus in terms of lives and livelihoods, plus the cost to procure and administrate vaccinations is crippling our already stalled economy.
The unemployment figures were announced yesterday and indicated that over 32% of South Africans were unemployed. These official figures exclude those who have stopped looking for work and several other sections of the potential workforce that are excluded from the figures. Analysts say the true rate of unemployment is closer to 50% or even higher.
Following the announcement that the national energy regulating authority, Nersa, granted Eskom the right to recover the monies lost by allowing a 15.63% tariff increase, South Africans cannot accept a further burden on their already depleted salaries.
What further measures will Mboweni take? Will he bail out the failing SOEs yet again such as Eskom, SAA, Denel and a host of others? Will the public be expected to keep paying exorbitant salaries to the bloated and inefficient public sector?
It is unlikely Mboweni will increase personal tax, especially on lower-income earners, but there has been speculation on a potential VAT increase although this is unlikely.
The fuel levy is almost certainly going to take a hit and, with the current escalation in the price of Brent Crude, more fuel increases are anticipated. And, of course, the favourite taxable items will be hit hard so look forward to paying more for your dop and your cigarettes,
Although the outcome does not look too rosy at the moment, let’s hope that amid the gloom and doom Mboweni points us toward the light at the end of the dark tunnel. We will have to wait for the news this afternoon to find out.