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'Only good news about #BudgetSpeech is bad news already known' - economist

Finance Minister Tito Mboweni is set to present what’s being billed as the most difficult Budget in the post-apartheid era.

Finance Minister Tito Mboweni delivers the 2018 Medium Term Budget Policy Statement in Parliament on 24 October 2018. Picture: GCIS

CAPE TOWN – There is little likelihood that Finance Minister Tito Mboweni will announce major tax hikes when he delivers his maiden Budget speech on Wednesday.

While public finances are under pressure, taxpayers are hard pressed and it's also an election year.

Why Tito Mboweni's 2019 Budget speech will be South Africa's toughest yet

But with Eskom’s woes casting a long shadow over the economy, the budget is unlikely to provide much cheer.

Mboweni’s set to present what’s being billed as the most difficult Budget in the post-apartheid era.

Economist Iraj Abedian explains: "GDP is not performing, revenue is not coming in and the South African Revenue Service (Sars) is not in shape to collect. SOEs are all in a desperate financial state. And on top of that, it’s an election year."

Abedian says Mboweni can tighten the screws on wasteful spending by the state and save billions as well as drive moves to get Sars back in form as an efficient tax collection agency, while pushing the debt barriers as far as possible without entering the danger zone of a downgrade to junk status, which would be “catastrophic”.

“No government in any democratic country can afford, in an election year, to be too tough. However the minister turns the situation, it will still come across as a very tough budget."

Abedian says the only good news about today’s Budget speech is that all the bad news is already known.

(Edited by Shimoney Regter)

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