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All eyes on Gordhan, even Charlie Chaplin’s

by Paul Vecchiatto, 27 February 2013, 08:10
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CELEBRITY PRESENT: A man dressed as Charlie Chaplin outside Parliament in Cape Town, where Finance Minister Pravin Gordhan is delivering his budget speech on Wednesday. Picture: PAUL VECCHIATTO
CELEBRITY PRESENT: A man dressed as Charlie Chaplin outside Parliament in Cape Town, where Finance Minister Pravin Gordhan is delivering his budget speech on Wednesday. Picture: PAUL VECCHIATTO

“CHARLIE Chaplin” stood outside the gates of Parliament on Tuesday, and he will be there again on Wednesday to see what will happen when Finance Minister Pravin Gordhan releases his 2013-14 budget.

So do we all wonder.

Just how will Gordhan, who is about to deliver his fourth budget speech, bring balance to a budget that is clearly under strain as the government needs to bolster increased spending for a welfare state while its revenue stream is under strain?

President Jacob Zuma has already said that gross domestic product is forecast to grow at 2.5% this year, almost a full basis point lower than earlier predictions, but added that the government would continue to provide the services to which the people have become accustomed.

There are about 15-million people in South Africa receiving one social grant or another, while there are only 6-million taxpayers.

Furthermore, investor sentiment has to be reinvigorated following severe labour unrest and talk of nationalisation of the country’s mines in its various forms.

Zuma has asked Gordhan to commission a tax study to see if the government is getting the appropriate sources of revenue for its programmes.

On Wednesday, of particular interest to international and local mining houses will be the possible recommendation of a mining royalty tax.

Some have called this possibility nationalisation by stealth.

Last year, Gordhan talked about government spending “haircuts”, but the public sector wage increase of 5.5% means that, if anything, it was a little trim at best.

Let’s see if this year will be any different.

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