There are three aspects of a budget:

Income (GDP)

Income into our budget relies on taxes in various forms. VAT( everyone @ 15%) Income tax (only 10% of the population to a maximum of 45%) Customs and excise duties and sin taxes….. All of these pour into a pot to cover expenses…..The budget speech alluded to better than expected revenue collections resulting in a surplus of R94 billion more than a year ago. 

Expenses

To ensure that income is sufficient expenses need to be curtailed…..it’s a case of cutting the cloth to make the suite fit….Another R1 billion to SAA?

Debt 

We are apparently starting to stabilise our debt at 18% of revenue. The cost of debt is ramping at 9% per year and is the budget’s fastest growing spending item. Against a downgraded projection from treasury that our economy will grow to 0,9% there will be pressure to pay off debt. 

Bottom line is that we will be struggling along, trying to sway a probable grey listing, move up the ladder of an existing down grade in the face of load shedding to keep the wheels turning.