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A Rare Balanced Budget

Anja Merret

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I happen to be in South Africa on holiday during the annual budget speech, on Feb 21, 2007, by the Minister of Finance Trevor Manuel. This is his 11th. During this occasion he announced the first budget surplus for the country since 1960. Regrettably, the media did not shower him with the applause he deserves for this. In fact the headlines of the Cape Town newspaper, which I got to read about the budget, screamed “Manuel’s spending spree". Yes, he is spending, but that’s because he has the money to do so.

Developing countries tend to run even larger deficits than developed countries and subsequently need to borrow money to fund basic infrastructure and social services. The success of this particular Minister of Finance rests on several factors. The most important one is that the Inland Revenue services, or the South African Revenue Service (SARS), has been hugely successful in collecting taxes. In fact SARS collected R29.5 billion more during the year than had been expected.

Secondly, Manuel has been frugal in his spending during the years that he has been at the helm of the ministry. Many times he has been strongly criticised for not spending more on alleviating poverty and increasing job opportunities for the huge unemployed work force. These two in particular, poverty and unemployment, are considered the main contributors to the high crime rate in the country. Through this fiscal conservatism, he has been able to reduce the personal and company tax burden over the past years. One of the benefits of this has been an annual steady growth of the economy.

With the success of the collection of revenue he is able to fund large increases in spending towards teachers’ salaries, health workers and crime prevention services as well as road and transport infrastructure for the World Cup in 2010. Of course, as usual, he has been criticised for not spending enough on immediate poverty relief. Spending the money on education and training, for me, is a better strategy. But then I am not living in a squatter camp with no food for my children, I am not qualified to comment. Increasing the police force and extending the justice system, is extremely important if one wants to make any difference in the high crime incidences. With other words, excellent job Trevor Manuel. Even the opposition has been muted in that the normal vocal outburst of heavy criticism that generally accompanies the budget speech, has been particularly subdued if one can believe the newspapers.

Often South Africa, and I have added my voice to this, is criticised heavily for not delivering in all sorts of areas, not the least for not interfering in Zimbabwe’s economic and political implosion. Too often, recognition is not given for its achievements such as steady economic growth, tightly controlled inflation and sophisticated financial services amongst many. For all its growing pains as a new democracy and with its mandate of trying to right the wrongs of the apartheid years, this South African government is achieving some noteworthy successes. As for Zimbabwe, interfering might not have changed the course that the country has taken. Have a look at Iraq and what interference has done to that country, and possibly leaving Zimbabwe to sort out its own problems may be the best solution after all. And yes, it is the same thing.

Anja Merret lives in Brighton, UK. She has recently started a blog and writes on issues that interest her from self-improvement to tech stuff for amateurs.

Anja has had a varied and interesting career journey. She started as a high school teacher, changed professions to become an admin manager at her late husbands law firm because this allowed her the flexibility to look after her small children at the time. After many years she left this position to try her hand at an art gallery, moved across to public relations and finally found her niche in education again managing a computer training centre for many years. During this time she also involved herself in writing standards and qualifications in the new media field.

10 months ago she moved from South Africa to join her younger daughter. She now writes a blog and also looks after the business interests of her daughter who is a Flash and Accessibility expert. She has BA (Hons) MBA degrees and on rare occassions she feels like a frustrated wannabe academic. That passes quickly though.


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