Deficit rise 'the result of low growth, not overspending'
The government is determined to reduce the deficit in a bid to satisfy international credit rating agencies, it would appear from the 2013 budget.
The increase in the deficit, which rose to 5.2% of gross domestic product rather than the projected 4.8%, was not the result of government overspending, but rather that expected revenue growth had not occurred.
In the case of personal tax – the biggest revenue source – and corporate tax, there were large drops of R12-billion and R11.5-billion respectively.
The solution proposed in the 2013 budget is to prioritise discipline. Over the next three years, R10.4-billion has been cut out of expenditure, although the budget still makes it possible for government to continue spending.
Real spending will rise by 2.3% over each of the three years, down from the 2.9% estimated in October last year..