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Budget 2019: From Eskom to tax, this is Mboweni’s budget in a nutshell

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Finance minister Tito Mboweni’s first National Budget came with no real surprises or shocks. Given the pressure-cooker that is state finances, especially those of struggling power utility Eskom, it appears to be a well-balanced act.

Government’s central economic policy goal remains to accelerate inclusive growth and create jobs, said the minister, while ensuring sustainable finances by containing the Budget deficit and stabilising public debt.

In the light of the coming national election, Mboweni’s cautious approach in a high-risk environment comes as no surprise.

Eskom

The immediate and substantial risk that Eskom poses to the SA economy and state finances was partly addressed by allocating R69bn over three years  – R23bn per annum – to the electricity provider as a support package with conditions.

As part of a raft of conditions a “chief reorganisation officer” will be jointly appointed by Mboweni and Public Enterprises Minister Pravin Gordhan.

The officer will work with Eskom’s board and management to carry out the recommendations of the Presidential Task Team.

Treasury also included some details about how Eskom will be unbundled into three entities, saying each entity would in time have its own board and leadership, debts and assets.

In his address Mboweni had harsh words for the strain Eskom is placing on public finances.

“Pouring money directly into Eskom is like pouring water into a sieve,” he said.

Ratings agencies

Mboweni said Treasury had been having “difficult” conversations with ratings agencies about what effect the Budget would have on SA’s sovereign debt rating. He said in his opinion the effect should be credit positive, given the practical interventions government is planning at the power utility.

Taxes

The Eskom support package was done without needing to up income or corporate taxes or VAT. Personal tax brackets were unchanged – meaning more people may face a heavier tax burden as they move up brackets. There is a new carbon tax on fuel, and the usual – albeit moderate rise in fuel taxes and upping the “sin taxes” of tobacco and alcohol was announced.

The tax revenue estimate for 2018/19 has been revised down by R15.4bn, relative to the mini Budget in October 2018, the third year in a row that tax targets are not reached.

SA Revenue service

The revenue collection shortfall was caused, in part, by problems with tax administration at Sars, said Mboweni, in addition to broad economic weakness, and higher than expected VAT refunds.

“Improving collections hinges on restoring the efficiency of SARS. In the short term, such improvements may be more effective in raising revenue than further substantial tax increases.”

Salary Bill

On the expenditure side, measures will be introduced to realise a R27bn reduction in the state salary bill over three years by incentivising early retirement in the public sector. But no big cuts in social spending emerged.

Economic outlook

The economic outlook has weakened since the 2018 mini budget, with GDP growth now projected to increase from 1.5% to 2.1% in 2021 compared to forecasts of 1.8% for 2019 and 2.1% for 2020 last February. Consumer inflation is expected to average 5.2% in 2019, up from 4.7% in 2018.

Fiscal position

The budget deficit is projected to narrow from an estimated 4.2% of GDP in 2018/19 and to 4 % of GDP in 2021/22. Gross debt is projected to stabilise at 60.2% of GDP in 2023/24, with net debt stabilising at 57.3% of GDP a year later. Last year the budget deficit projection for 2020/21 was 3.5% and debt supposed to stabilise at 53.2% in 2023/24.

Spending plans

Real growth in non-interest expenditure averages 2% per year over the next three years. The fastest-growing area of spending is community development, which includes funding for free basic services and human settlements. Over the next three years, more than half of government spending will be allocated to basic education, community development, health and social protection.

Debt

Net debt is expected to reach R2.52 trillion in 2018/19, or 49.9% of GDP, increasing to R3.47 trillion or 55.5% of GDP by 2021/22. Debt service costs rise to R247bn or 4% of GDP by 2021/22.

‘Post-Soviet era’

Mboweni injected a different ideological flavour  in a pre-Budget briefing to journalists, by repeatedly stating that the world is in a “post-Soviet era” where massive state-owned enterprises were not the order of the day anymore.

Victor Fungai Muzvidzwa is the founder and senior editor of HypeAvenue.com magazine.

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“A picture’s worth!!! Twitter users react to AKA & DJ Zinhle kiss

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DJ Zinhle and AKA are madly in love (again) and want the world to know it.

The on-again lovers made their relationship Instagram official earlier this month and now they are sealing the deal with a kiss – a very public one we might add!

AKA took to Twitter on Monday to thank his friends and fans who helped him celebrate ‘Touch My Blood’ going double-platinum.

“Thank You for coming out this past weekend,” he captioned a series of pictures from the event.

One of the images showed him kissing Zinhle.

Zinhle and AKA broke up in late 2015 after she found out he was having an affair with Bonang Matheba- while she was pregnant with their daughter Kairo.

But that is all water under the bridge now. The couple’s fans are glad they are back together.

“Love conquers all. Zinhle truly adores you,” one user wrote.

 

Zinhle and AKA broke up in late 2015 after she found out he was having an affair with Bonang Matheba – while she was pregnant with their daughter Kairo.

But that is all water under the bridge now. The couple’s fans are glad they are back together.

“Love conquers all. Zinhle truly adores you,” one user wrote.

Another tweep wrote: “Kairo Must Be Loving This. Because she got wonderful parents.”

“Love always wins! I am so happy for you AKA. May God bless your relationship. Don’t rush yourselves, take your time to enjoy each other,” a third wrote.

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DREAMS DO COME TRUE!!! Talented guitarist plays outside DJ Tira’s home until he noticed him

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Mduduzee Ncube is living proof that dreams do come true if you just believe in yourself. This aspiring musician has done the most to make his dreams come true. He even went as far as standing outside DJ Tira’s home performing until he heard what he had to say.

The talented busker, who started out by entertaining the public on Durban’s South Beach, has taken every opportunity that he can to make his name known.

Mdu took a stand and demanded to be heard. He stood in front of the famous DJ Tira’s house until he came out and acknowledged his presence. This man’s persistence is inspiring. Mdu stood outside Tira’s house and played his heart out until Tira came outside. Not being a widely-known artist, Tira was shocked to see a strange an outside his home, but he was also humbled by his perseverance.

Dogg DBN just happened to be at Tira’s house at the time and was the one who captured the moving moment and shared it on social media.

 

 

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So this guy decided to come camp outside Afro Studios…. check the video for more info or my Facebook fan page DJ Tira.

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Mdu impressed Tira and Dogg DBN so much that he secured himself a gig with Dogg DBN and collaboration with Tira. Yusssss, my man! Tira has sent Mdu for a makeover today in preparation for his big gig tomorrow. Big ups to Tira for the generosity and kindness!

 

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And the day begins… #AfroAtWork … Mdu make over 🔥#MduNcube

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“I just work my a** off!!! NaakMusiq hits back at forex trading claims

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Multi-talented Anga Makubalo aka NaakMusiQ took to Instagram to show off his rides and his upmarket house with a caption, “Ya’ll keeping the score while watching me score, ya’ll keep the awards I’ll take the rewards”.

The actor and musician has not only gifted Mzansi with hits such as MamelaniCall Outand most recently Ntombi, where he features Bucie, but has simultaneously shown off his acting skills in popular productions such Generations, Isidingo and iGazi.

This should be proof that he has made money through acting, CD Sales, Live shows, Digital Sales & Streaming, Merchandise Sales but to some its not enough,

A fan Thuli Maumpa popped onto Anga’s timeline and asked him if he is into forex,

“I like the I don’t sleep much part but if you don’t do forex trading, what are you doing? Please share and woow whatever it is you doing a great job I’m so proud of you Anga ,may God continue to bless you.”

Anga didnt hold back and responded,

“Bro I act and sing…why do people thing there is something else I’m doing. I just worked hard..I’ll literally add 2 or 3 more gigs in a night and be EXHAUSTED than sitting at home and relaxing. I don’t have a life. My life is my work. There are no secrets, I’m not running a secret business. I just work my ass off, straight up!.

 

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