The National Budget Speech was one of the most eagerly anticipated in decades. With the recent
widespread downward revisions to the economic growth outlook, the government had to focus its attention on trying to avoid the looming prospect of a sovereign rating downgrade to sub-investment grade. The economy is expected to grow by 0.9% in 2016, down from 1.3% last year. The decline in the forecast has been a function of both the depressed global environment and the local drought. The budget deficit is expected to fall from 3.2% in 2016/17 to 2.8% in 2017/18 and 2.4% the following year. The debt to GDP ratio is expected to stabilise at -4% in 2016/17. This year the minister forecasts that an additional R18.1 billion of tax revenue will be raised, with an additional R15 billion in each of the subsequent two years. Some of the proposed revenue increases will come from the introduction of: sugar tax, adjustments in capital gains tax, transfer duties and tyre levy.