Minister Pravin Gordhan's Budget speech will likely focus on
spending, says KPMG's Cuma Limekaya
Labour and job creation
Labour will be hoping to see an increase in minimum wage at a
rate significantly higher than inflation. We expect an increase but
not significantly higher.
Gordhan's 2010 budget speech highlighted an undertaking to
create employment. To this end, we can expect to see targeted
measures to promote job creation – especially amongst the
People in the lower income groups will be hoping for an increase
in their social grant. There's been quite rapid food inflation
in the past two quarters so their real purchasing power has
diminished from last year and we expect that Gordhan will
increase this marginally as he has done in the past.
Revenue sources / tax base
Salaried individuals will be hoping for tax cuts and reprieves
as consumers continue to struggle with high debt levels coupled
with increased lending rates. Realistically speaking however,
Government is going to need extra revenue to fund its planned
expenditure – this will most likely be generated by
additional and higher taxes.
The question is: Will tax increases happen before the tax
review is finished in a year or two?
The market is eagerly waiting to learn what Gordhan will propose
in this budget speech to generate the revenue that South Africa so
This article first appeared in Drum, 25 February 2014
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