Today is Finance Minister Malusi Gigaba’s maiden budget speech.

His first major speech since taking over from Pravin Gordhan nearly seven months ago, he will be laying out the government’s spending plans for the next three years, as well as outlining how he intends to deal with the rising government debt, reports EWN.

Although the Medium Term Budget Policy Statement (MTBPS) – generally referred to as the mini budget speech – is not one to attract much attention, today’s is likely to be the most difficult budget of recent times.

By the end of it, Gigaba, whose natural inclination is to not pick a side, will have needed to appease investors, stimulate growth and to keep ratings agencies at bay.

He will also have to come up with a few credible solutions for “how a R40 billion to R60 billion revenue shortfall will be made up, how state-owned enterprises will be reformed and how government will moderate spending,” explains MoneyWeb.

No pressure there, son.

Lumkile Mondi, an economics lecturer at the University of the Witwatersrand in Johannesburg, suggests Gigababa is well aware of his role in the future of the country:

“We are entering a very dangerous phase in our budgetary process. It will be extremely difficult to stick to expenditure ceilings and deficit targets. There will be push towards moving things off balance sheet. Gigaba is in a very, very hard place and he knows it.”

Does this mean he will raise taxes? Or sell off assets? Or will he finally stamp down on the siphoning off of public funds so as not to avoid an economic meltdown? Eish.

To put things very simply, here’s Huff Post SA:

…if government indicates that they are cash-strapped and in big debt, they could decide to raise personal income tax to cover their expenses. This means you would have less in your pocket, which might impact your budget spent on groceries, transport and other household expenses.

“So, when you listen to the mini-budget speech, you can a good sense of whether or not you might need to make some financial adjustments in a few months.”

…the collection of revenue to fund government expenditure was expected to fall well below budget. And if this is indicated by Gigaba, South Africa may risk another rating downgrade, she cautioned.

“If this is the case, South Africans can expect tax increases next year,” added [economics lecturer from the University of KwaZulu-Natal, Ntokozo] Nzimande.

“This is why everyone should care, because, ultimately, it affects your pocket,” he said.

Gigaba’s speech comes less than two months before the ANC is due to elect a new leader, who will also be its presidential candidate in the 2019 elections when Zuma steps down.

“What we do need, is a bit of a miracle in December and that the person who comes in just starts cutting the fat,” Dennis Dykes, chief economist at Nedbank, said.

And Efficient Group’s Dawie Roodt said agreed:

“Winston Churchill said about the Americans that you can always expect them to do the right thing, after they have exhausted all the alternatives,” he says.

“And that’s where we are now too.”

Check in tomorrow for an update on what went down.

[source:huffpost&moneyweb&ewn&news24]