South African economists have reacted to Finance Minister Trevor Manuel’s Budget speech delivered on Wednesday.
Dawie Roodt, chief economist at the Efficient Group: “The government has real guts buy cutting corporate tax. It’s just a 1% cut but it is nevertheless a cut.”
Mike Shussler, economist at T-SEC: “We are very happy because this was a good budget overall. I am just a bit worried about revenue increases in terms of where we are right now. The problem is that a 12% revenue increase is above the Gross Domestic Growth and that is a problem, but the deficit is likely to come down and that is good news.”
George Glynos, market analyst at Econometrix Treasury Management: “I think it is generally another positive Budget which is definitely aimed at creating growth. I think consumer spending will persist in the next couple of years given the income tax breaks. It is great to see the focus on corporate tax and the [tax breaks on the] small and medium enterprise side is fantastic news. It is generally a fairly good news Budget. There were no massive surprises other than the corporate tax breaks and I didn’t expect income tax breaks to be that large.”
Nicky Weimar, economist at Nedcor Bank: “It was a good budget and what impressed us was the reduction in company tax. The relief to companies was very moderate but we think that stimulus is in the right place. The rest of the budget was pretty much as expected. The gross domestic product (GDP) figures were revised up and that makes the deficit figures look better.”
Neva Makgetla, economist at the Congress of South African Trade Unions
(Cosatu): “We are happy about this budget overall because the government has managed to increase expenditure, however, we are concerned that tax cuts will mostly benefit the rich.” – I-Net Bridge