No surprises in the MTBF speech

South Africans can take comfort that in spite of all the global economic uncertainty Finance Minister, Pravin Gordhan’s national budget is still fundamentally on track.

To view my video summary click on the link below:

MTBF 2012 Summary (10 mins 40 secs)

Highlights of the MTBPS include:

  • RSA’s anticipated growth rate for 2012/13 has dropped only slightly from the 2,7% forecast back in February 2012 to 2,5% today
  • Overall tax collections are within R5 billion of original estimates
  • The National deficit for 2012/13 will be contained at around R157 billion or 4,8% of Gross Domestic Product
  • National deficit levels will decrease to R134 billion pa or 3,1% of GDP by 2016
  • If all holds to forecast, taxpayers will be spared any substantial tax increases when the National Budget 2013/14 is presented to parliament in February 2013

Pravin Gordhan displays enormous courage in sticking to his guns and not changing the game plan in spite of the economic uncertainty that has prevailed in recent weeks.

But remember that most of the taxes for 2012/13 have still to be collected over the 2012 festive season and by way of the second provisional corporate tax collections in February/ March 2013. Much could change.

However, past estimates of National Treasury have been pretty accurate, so all should be well.

RSA remains at risk to the global economic crisis. And with the International Monetary Fund ‘staff’s fan index’ predicting a 1 in 6 chance of a contraction in global growth rates to below 2% in 2013, macroeconomic factors remain uncertain.

Concern still surrounds:

  • the state of the  balance of payments current account that has declined to over 5% of GDP during 2012
  • Weakening exchange rates
  • Inflation rates, particularly on food where a 9% inflation rate is predicted for 2013
  • The loss of production in the mining sector of about R10 billion (before taking into account knock-on effects on other industries)
  • The shortfall in fuel levy collections (approximately R1,7 billion) which coupled with the Gauteng toll road debacle will send fuel levies through the roof during 2013

But RSA lives to fight another day. There is a lot to be said for that, in these uncertain times.

Yes, I would still far rather face a future in the South African economy under the leadership of Pravin Gordhan than throw my lot in with the Eurozone.

For a video summary of the lead up to the MTBF click below:

Lead up to MTBF (11 mins 50 secs)

For a video overview of the SARS and National Treasury Statistics 2012 go to:

 SARS & Treasury Statistics (10 mins 18 secs)


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