Budget 2007: poverty amidst plenty

South Africa's future economy

By: Claasen M. et al
Published by: Institute for Democracy in South Africa (IDASA), 2007
Via: Eldis

This latest report from the Budget Information Service at the Institute for Democracy in South Africa examines the government budget for 2007 and proposes future policy options. Idasa’s Budget Information Service (BIS) uses data and budget information published by government to analyse revenue and expenditure impacts on the lives of low income, poor and vulnerable communities. Budget 2007 is tabled at a time when the South African economy has been growing in a sustained and possibly accelerating fashion. Government has been able, through an administratively efficient tax system, to collect increased tax revenues as a result of this trend. Thus, whilst the fundamental resource constraint remains applicable, the context of Budget 2007 is also framed by the question of how one budgets in a time of plenty. The authors propose the following questions:

• To what extent should government invest for the future and to what extent increase programme spending and transfers to needy households now?
• To what extent should tax rates be adjusted?
• What is the nature of the external risk faced by the South African economy and how much caution is appropriate caution?
• Under what circumstances should a developing country's government run surpluses, and are those circumstances applicable here?

(http://www.idasa.org.za/gbOutputFiles.asp?WriteContent=Y&RID=1784)