Getting fiscal ‘mix’ right in Feb 2018 Budget a major determinant of investment status

Credibility and confidence in economic policy will be key factors in evaluating the latest fiscal response to recent credit rating agency decisions.  That’s the word from NWU School of Business and Governance Economist, Professor Raymond Parsons.

“The decision by President Jacob Zuma to instruct the Presidential Fiscal Committee to actively tackle four key areas of fiscal policy to shape the 2018 Budget in reaction to the recent decisions by the credit rating agencies is welcome, especially if combined with the fiscal slippage apparent in the recent Medium Term Budget Policy Statement.”

Professor Parsons also welcomes the promptness with which Finance Minister Malusi Gigaba is seeking to implement the decision, in view of the urgency of the economic and fiscal situation SA is facing.

“Deteriorating public finances are now the Achilles Heel of SA’s present economic outlook.”

Professor Parsons says that to re-establish credibility in the fiscal process, it is essential that the emphasis now be placed on how government spending can be reprioritized to secure a new balance between growth and fiscal sustainability.

“Government spending simply has to be brought into much better line with what the economy can now afford. If not, SA will drift in into an inevitably negative ‘tax-and-spend’ cycle.

“First prize now is for SA to also avert being dislodged from key global market indices next year, in view of its implications for borrowing costs for both the public and private sectors. This would ultimately be bad for both growth and employment. It is imperative that in 2018 the SA economy begins to break out of its ‘low growth trap’.

Professor Parsons adds that it would also be helpful to credibility and confidence in policy if, even at this late stage, Finance Minister Gigaba was to include the advice of selected key private sector and academic economists.

“The issues at stake economically and fiscally are so important now that the most inclusive advice will assist in promoting credibility. It is clear that to get the fiscal ‘mix’ right in the 2018 Budget in February will now be a major determinant of SA’s future investment status.”



Latest


16 Feb 2021
Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the…

Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the delivery of transition management services across Southern Africa. Under the partnership, Standard Bank’s clients will gain access to Northern Trust’s full suite of transition management services. Transition Management is a…

16 Feb 2021
Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at…

Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at Metope Investment Managers The tax year, along with the deadline for an investor’s maximum R36 000 annual tax-free savings account contribution, comes to an end on the 28 February 2021. Investors…

16 Feb 2021
Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises…

Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises to deliver smoother, more consistent investment returns, despite cyclical turbulence of financial markets. Given last year’s drastic swings in financial markets and continued uncertainty on how the Covid pandemic will…

16 Feb 2021
Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well…

Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well as the uncovered population, in being vaccinated. As the COVID-19 virus continues to spread, a third wave is imminent, should the vaccination rollout not commence soon. Speaking at a recent…


Top stories


10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za