Latest news with #VanderWesthuizen
The Citizen
23-05-2025
- Business
- The Citizen
Budget 3.0 was not a chainsaw budget, economists say
According to reports, this time all the parties in the government of national unity is happy with Budget 3.0. Budget 3.0 was not a US Department of Government Efficiency-style chainsaw budget, economists say, after Minister of Finance Enoch Godongwana delivered Budget 2025 at last on Wednesday. Mike van der Westhuizen, portfolio manager at Citadel, says the third version of Budget 2025 was carefully calibrated to maintain political harmony within the government of national unity (GNU), but risks remain. 'It is a safe budget and they have done enough – for now. But the real story lies in what was left out, not what was included and it faces risks if the fiscally expensive Social Relief of Distress (SRD) grant becomes permanent, or if the economic growth that it is intended to stimulate does not materialise.' Van der Westhuizen also notes that while the budget maintains fiscal consolidation and avoids austerity, spending reductions merely reverse earlier expansions seen in Budget 1.0. 'The SRD grant, which has been extended to March 2026 without any long-term funding plan is a key concern. 'A court ruling could compel government to make the SRD grant permanent and expand its reach, ballooning the cost from R35 billion to over R66 billion annually. None of this has been budgeted for in the outer years.' ALSO READ: Budget 3.0: Fuel levy replaced VAT hike but is it the better option? Also important what Budget 3.0 leaves out He also points out that Budget 3.0 leaves out several items that could pose fiscal risks in the near future, especially if they are added back in during the medium-term budget or next annual budget. 'There is also no mention of National Health Insurance (NHI), likely due to affordability concerns. 'In addition, several spending pressures were deferred rather than resolved, including support for Transnet's debt refinancing, the gap left by the withdrawal of key donor funding, such as USAID's PEPFAR programme, funding for Prasa's proposed rolling stock fleet renewal, infrastructure pipeline projects, population-driven provincial allocations, political party funding and resources for key institutions like the Office of the Chief Justice and Statistics SA. 'These omissions represent a significant risk if any of them materialise later this year without a matching revenue plan.' Van der Westhuizen says while there was no VAT increase anymore, tax pressures remain. 'Consumers may feel temporary relief from the decision to keep VAT at 15%, but the budget quietly introduces other tax pressures. 'There was no inflation adjustment to personal income tax brackets, which effectively increases the tax burden on individuals. A modest fuel levy hike kicks in from June and further tax changes are expected in the 2026 Budget to plug an estimated R20 billion revenue gap.' He says while Budget 3.0 is politically pragmatic and avoids market shocks, it is not without vulnerabilities. 'Unless growth improves and spending pressures are permanently resolved, the risks will only grow. It is a fine balancing act and right now the balance remains precarious.' ALSO READ: Sensible or underwhelming? Economists react to Godongwana's Budget 3.0 Fiscal consolidation in Budget 3.0 Arthur Kamp, chief economist at Sanlam Investments, says fiscal consolidation remains the central theme, with a combination of spending cuts and revenue raising measures roped in to stabilise and ultimately lower government's debt ratio over the medium term. 'The debt trajectory is, nonetheless, higher than previously projected by Treasury, given downward revisions to gross domestic product (GDP) forecasts. This serves to illustrate the ongoing challenge of fiscal consolidation in a low growth environment.' He points out that the emphasis on infrastructure spending is maintained but that expenditure risks still lurk and a decrease in the ratio of non-interest spending to GDP is delayed to the outer years of the medium-term framework. 'The cornerstone of fiscal consolidation remains a projected improvement in the primary budget balance. However, the tax-to-GDP ratio increases over the medium term, although the hope is that additional allocations to Sars will extend the nascent improvement in tax administration and remove the need for future (currently unspecified) tax increases.' ALSO READ: Godongwana cuts zero-rated food basket in Budget 3.0 Compromises and trade-offs in Budget 3.0 Prof Raymond Parsons, economist at the NWU Business School, also calls Budget 3.0 pragmatic given the current circumstances. 'As the minister emphasised, various compromises and trade-offs were inevitably necessary to now achieve a workable 'balancing of the books' which is confidence-building. 'The commitment to spending reviews is also an essential one. The overall thrust of Budget 3.0 shows a strong pivot in fiscal strategy towards growth and investment, which is where the basic solutions to South Africa's public finance challenges ultimately lie. 'If fully implemented, the strong emphasis on infrastructural development bodes well for the 3% GDP growth in the medium term envisaged by the GNU. However, both the role of Operation Vulindlela and the participation of private sector investment indeed remain indispensable to successful delivery of key infrastructural outcomes, especially in transport, logistics, energy and water.' Parsons says therefore, the latest Budget provided a combined policy and project foundation on which to build South Africa's fiscal sustainability over the longer term. 'With the debt-to-GDP ratio to be stabilised at a higher level of 77%, the margin for error continues to remain small. 'There are still future risks to fiscal policy, as highlighted by the higher debt-to-GDP ratio and the warning that the 2027 Budget may have to consider new taxes. The good news is that this is now a GNU Budget, which is not only a plus for political stability, but should also ensure its subsequent passage through the various parliamentary processes.' ALSO READ: Godongwana cuts government spending to offset VAT shortfall The importance of promoting policy certainty He says what is also important to promote policy certainty is that the positive reforms in Budget 3.0 are speedily implemented and are also seen as irreversible. 'This includes the investment in Sars' capacity to improve tax collection and revenues. 'The fact that the original assumption underpinning the Budget of 1.9% GDP growth this year has been sharply reduced to 1.4% recognises the new global and domestic economic realities shaping South Africa's growth prospects. 'While this assumption may still be on the optimistic side, the more conservative Treasury projection nonetheless simply confirms why the third budget needed to be strongly growth-dominated. 'If South Africa wants to grow its tax base to enlarge its fiscal space, it needs a rapidly expanding economy with faster job creation. In addition, taxpayers must see they are getting value for money.'
The Citizen
29-04-2025
- The Citizen
Urgent intervention needed to stop water meter theft in north
In the heart of Region 1 in Pretoria North, residents are grappling with a series of problems that are threatening both their safety and access to basic services. Region 1 includes suburbs such as Akasia, Dorandia, Florauna, Tileba, Theresapark, The Orchards, Chantell, Rosslyn, Soshanguve, Klerksoord and Winternest. From non-functional streetlights to the alarming rise in infrastructure thefts, it is evident that urgent intervention is needed. Mickey van der Westhuizen, a local DA activist and community leader, has stepped forward to voice these concerns and to call for swift and co-ordinated action to resolve these escalating issues. One of the most pressing issues facing the residents of Ward 98, where he makes his calls to action, is the increase in crime, particularly the theft of water meters. Ward 98 consists of Klerksoord, Clarina, Heatherdale, Theresapark, Dorandia, Tileba, Eldorette and Winternest. 'The theft of water meters has become a severe crisis for residents, with one individual recently going without water for nine days due to the disappearance of these meters,' Van der Westhuizen shared. 'This criminal activity is driven by the valuable brass components in the meters, and it's affecting people's ability to access a basic human right: clean water.' South African law recognises access to water as a constitutional right under Section 27(1)(b), and it is deeply troubling to him and residents that criminals are exploiting this essential service. The stolen meters, which contain brass fittings worth R72/kg, highlight the profit-driven motives behind this crime. 'Scrapyards must do more to prevent the sale of stolen items,' Van der Westhuizen said, urging stricter verification processes at scrapyards and increased vigilance from local authorities. The thefts are not confined to water meters alone. The theft of underground electrical cables has been another significant problem. Klerksoord and Clarina residents have been left without power for hours on end, with criminals repeating the theft of electrical wires twice within a single week. Residents have attempted to mitigate these crimes by creating barriers like placing rubble and cutting down trees to make it harder for thieves to access the infrastructure. 'These measures reflect the resilience of our community, but we need greater support from the metro to ensure that essential services are restored and protected,' the activist said. The situation is further compounded by the recent imposition of a 40-hour overtime cap by the metro. While intended to promote fiscal discipline, the move has led to delays in critical repairs, exacerbating the ongoing power outages, water leaks, and sewer issues in the area. He emphasises that the blanket overtime restrictions are negatively impacting residents who already face unreliable service delivery. 'It's time for a more targeted, community-centred approach to service delivery that prioritises the well-being of the residents over financial constraints,' he said. Van der Westhuizen advocates for a multi-faceted approach to address these problems. The approach includes: – the establishment of relief teams to support overburdened departments during peak times, – the implementation of digital dashboards for real-time classification and response to emergencies, and – better communication between the authorities and residents regarding service delays and available reporting channels. 'Only through a collective effort of residents, local authorities, and service providers can we begin to restore the trust that has been eroded over time,' he said. Van der Westhuizen, as a father, stressed the importance of a clean, safe, and secure community for the next generation. 'I want my children to grow up in a place where they can thrive, a community where they have access to the basic rights they deserve, just like every other child in South Africa,' he remarked. 'As a father, it's my responsibility to ensure that this community, which was once a beautiful place to live, doesn't continue to deteriorate.' His passionate plea for change resonates with many residents who share the same frustrations and concerns. As he aptly put it: 'It's about protecting our future generations and ensuring that they have the same opportunities that we want for our children.' The metro's comments have not been received at the time of publication. Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
