WORLD NEWS TOMORROW -JOHANNESBURG – A South African budged without income is the tail behind this story.  n a press release by the political party , the FF Plus of South Africa was stated that sky-rocketing, deficit is almost a certainty for South Africa and that it will make the 2013 budget for government the most difficult the Minister of Finance has since the collapse of the country political stability during 1994.

The Finance minister of South Africa is caught between greater public service payments, public service salaries included, on the one hand and notably less tax revenue as a result of the mining strikes and low economic growth, on the other hand. It seems that the ongoing strikes and “toi toi” have final got its effect in the country as many predicted almost a decade earlier.

The only option the Minister of fiance in South Africa have, according to local information  are to solve these problems by increasing taxes that will only further dampen the still slow growing economy and possibly push it for final destruction. To many this would be theof no return in S. This will lead to even less tax revenue next year which could become a deadly financial deat- spiral.

The answer is to make concessions to small business enterprises and speed up the infrastructure projects. Through this, growth in the economy could be encouraged and a more favourable climate can be created for the private sector to improve economic growth.

Due to the increasing electricity, fuel and other prices, the budget should contain measures which would bring relief to the poor and pensioners. Especially pensioners, who are trying to take care of themselves through their savings, should be helped because low interest rates on their investments are busy killing them financially.

The minister should announc detailed measures in order to send out a strong message to the ratings agencies that government is serious about enforcing financial discipline in the public service. This has to coincide with clear steps to cut luxury and unnecessary expenditure in order to set an example to the rest of the country.

The consistent increase in social grants is a huge concern for the FF Plus. Although the president says South Africa is not a welfare state, it is exactly what is at present happening with nearly 34% (17 million people) of the population receiving social grants currently. In reality it is a welfare state and this figure is still increasing. If minister Gordhan does not announce measures during his budget speech that will make South Africans less dependent on social grants, a crisis will develop in future. The crisis will arise in the 2020’s when income tax will no longer be sufficient for all the grants. When grants are then inevitably lessened, an Arab Spring and revolutionary situation can arise in South Africa.

The Minister should also announce measures which will ensure that allocated state funds are utilised correctly in practice. Millions of rand which are budgeted for roads, hospitals and infrastructure are just never spent. Especially on local government level, as little as 18% of the budgeted amounts are used due to a lack of skills.


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