TUESDAY, 5:00PM:
The government which has continued to insist that it will make its budget deficit target of 4% in the face of mounting evidence to the contrary, has finally hinted that it may miss by a small amount.
Deputy finance minister Gill Marcus told an investment conference arranged by stockbrokers on Monday that “even if we are not exactly on target, it should not be a reason to be nervous. It is the direction we are moving in that is important.”
Finance minister Trevor Manuel and director-general Maria Ramos took a hard-line stance last week, insisting the deficit target has not changed and that government will meet it. However Marcus said the more important thing is to “broadly meet our targets … whether the deficit is 4,1% or 3,9% is not issue.”
She also said the tax target could rise above 26% of GDP, reflecting improved tax collection methods, and that she was confident a change in tax collection will be visible within the next 18 months.