South Africa’s budget deficit for October 2006 was recorded at R3,3-billion compared with a small surplus of R384-million in October 2005, indicating the government is on track to meet its projected budget deficit of R7,8-billion.
The cumulative deficit for the year is R7,2 billion compared with a cumulative deficit of R13-billion in October last year, National Treasury’s statistics show.
Revenue collection in October slowed down compared with September’s strong growth, but the year-to-date revenue growth is still very much in line with the revised Treasury targets for the year.
“Specifically, growth in both companies tax and secondary tax on companies grew very strongly, due to higher company profits and stronger growth in dividends. There was lower growth in VAT receipts and import duties, probably a reflection of a slowdown in the consumption side of the economy,” say independent economic analysts RLJP.
Growth in expenditure grew at a higher rate than that of revenue collection, although once again, expenditure on capital assets was very poor.
“Capital expenditure was a mere R499-million for the month of October, and this category of spending is falling further behind the annual estimate with each passing month,” says RLJP.
The total annual capital budget for the national government is R6-billion, down from the R7,3-billion of the 2005/06 fiscal year.
“If the current trend continues, the capital budget for the next fiscal year may well be reduced again, as [the] national government continues to demonstrate its inability to spend,” conclude the analysts. — I-Net Bridge