Budget coverage
Thursday Mar 04, 2010
Reg Rumney
The big surprise in the Budget this year was that there was a big surprise.
It should be straightforward if not exactly a yawn. The presentation of the national Budget does not contain the big shocks of the apartheid years.
The ANC in government has adopted an approach of much greater transparency. The biggest change has been the adoption of three-year rolling budgets and the presentation of a Medium-Term Budget Policy towards the end of the year, in around October.
This sets out the main spending plans over the next three years.
Those plans are fine-tuned when the Budget is presented to Parliament early the next year, usually February.
The surprises in the Budget do not, mainly, come from changes in spending but in details of how State revenue is to be financed.
And for ordinary people the biggest news comes from changes in tax.
How did three major business news magazines see the Budget?
It's fair to say that the Print news media, which has more time to be analytical, did do their job of subjecting the Budget to critical scrutiny.
The newspapers did a credible job of covering the main themes in the Budget. Business Day, for instance, devoted a special supplement to the Budget, that covered many angles.
Weekly business magazines, however, have more resources and time to weigh up the Budget.
The Financial Mail concentrated, in its main body, on the political meaning of the Budget. FinWeek's main assessment, in its Budget supplement, was economic. Engineering News focused on the implications for the real economy.
The headline on the Financial Mail's editorial in its main body was "Gordhan draws a clear line in the sand."
This was the big story for those following the political contest within the alliance between alliance partners, Cosatu and the SA Communist Party, and the mainstream of the ANC on economic policy.
Newspapers have for some time now been forecasting a shift to the Left under the Zuma administration, prompted by sources who believed such a shift was about to take place, those who wished such a shift would take place and those who wanted to create an impression that such a shift was taking place. The hope was that the departure of former Finance Minister Trevor Manuel would allow the government to ditch inflation targeting, run artificially low interest rates, intervene in some way to lower the foreign exchange value of the rand to make exports more competitive, and intervene more in the economy.
Pravin Gordhan proved very much to be a man in the same mould as Manuel.
As the Financial Mail points out there was nothing to comfort the ANC's allies on the Left. Though there was some mention of broadening the Reserve Bank's mandate, inflation targeting was not abandoned, and the 3% to 6% target range retained. A pegged rand was rejected.
"The ambitious National Health Insurance scheme was in effect shot down," the FM noted.
It also wrote: "Unionists will not be savouring the minister's stern words on public-sector remuneration, where the wage bill has doubled in five years: 'It will now be necessary to moderate salary increases.'"
The FM almost crowed in a manner reminiscent of the years when it was the voice of organised business and capitalism:
"Gordhan spoke of reforms 'to increase inclusion and participation in the labour market' and there was a sardonic reference to the way 'our bargaining arrangements push up entry-level wages'. The free-marketeers in the Democratic Alliance could not have put it better."
It also spotted the reference to the need for Public Private Partnerships in health - not long after the health workers' union Nehawu had specifically opposed PPPs.
The FM, however, noted that the proverbial elephant in the room was Eskom and its proposed electricity tariff increases and huge funding needs, which got one sentence.
What the FM did not refer to, probably for lack of space, was the biggest sideswipe of all, towards the end of the Budget speech.
"Organised labour must embrace and act on behalf of all our country's workers - both those employed and those desperate for employment."
My colleague Robert Brand and I are fond of pointing out to students that the Budget is always political - but this one, in the context of what turned out to be misplaced expectation of major policy changes, was especially so.
The FM's main editorial was tightly focused. So it was left to an article in the FM's budget supplement to point out to its readers something that might have caused them to be less sanguine about Pravin Gordhan, for all his facing down of union pressure.
In the Budget supplement, the FM's Evan Pickworth pointed out the R6.5-billion personal income tax relief would not "evenly compensate for inflation, with those earning more than R120,000/year receiving only a 4.3% reduction - well below the annual inflation rate of 7.1%"
The big surprise in the Budget this year was that there was a big surprise.
It should be straightforward if not exactly a yawn. The presentation of the national Budget does not contain the big shocks of the apartheid years.
The ANC in government has adopted an approach of much greater transparency. The biggest change has been the adoption of three-year rolling budgets and the presentation of a Medium-Term Budget Policy towards the end of the year, in around October.
This sets out the main spending plans over the next three years.
Those plans are fine-tuned when the Budget is presented to Parliament early the next year, usually February.
The surprises in the Budget do not, mainly, come from changes in spending but in details of how State revenue is to be financed.
And for ordinary people the biggest news comes from changes in tax.
How did three major business news magazines see the Budget?
It's fair to say that the Print news media, which has more time to be analytical, did do their job of subjecting the Budget to critical scrutiny.
The newspapers did a credible job of covering the main themes in the Budget. Business Day, for instance, devoted a special supplement to the Budget, that covered many angles.
Weekly business magazines, however, have more resources and time to weigh up the Budget.
The Financial Mail concentrated, in its main body, on the political meaning of the Budget. FinWeek's main assessment, in its Budget supplement, was economic. Engineering News focused on the implications for the real economy.
The headline on the Financial Mail's editorial in its main body was "Gordhan draws a clear line in the sand."
This was the big story for those following the political contest within the alliance between alliance partners, Cosatu and the SA Communist Party, and the mainstream of the ANC on economic policy.
Newspapers have for some time now been forecasting a shift to the Left under the Zuma administration, prompted by sources who believed such a shift was about to take place, those who wished such a shift would take place and those who wanted to create an impression that such a shift was taking place. The hope was that the departure of former Finance Minister Trevor Manuel would allow the government to ditch inflation targeting, run artificially low interest rates, intervene in some way to lower the foreign exchange value of the rand to make exports more competitive, and intervene more in the economy.
Pravin Gordhan proved very much to be a man in the same mould as Manuel.
As the Financial Mail points out there was nothing to comfort the ANC's allies on the Left. Though there was some mention of broadening the Reserve Bank's mandate, inflation targeting was not abandoned, and the 3% to 6% target range retained. A pegged rand was rejected.
"The ambitious National Health Insurance scheme was in effect shot down," the FM noted.
It also wrote: "Unionists will not be savouring the minister's stern words on public-sector remuneration, where the wage bill has doubled in five years: 'It will now be necessary to moderate salary increases.'"
The FM almost crowed in a manner reminiscent of the years when it was the voice of organised business and capitalism:
"Gordhan spoke of reforms 'to increase inclusion and participation in the labour market' and there was a sardonic reference to the way 'our bargaining arrangements push up entry-level wages'. The free-marketeers in the Democratic Alliance could not have put it better."
It also spotted the reference to the need for Public Private Partnerships in health - not long after the health workers' union Nehawu had specifically opposed PPPs.
The FM, however, noted that the proverbial elephant in the room was Eskom and its proposed electricity tariff increases and huge funding needs, which got one sentence.
What the FM did not refer to, probably for lack of space, was the biggest sideswipe of all, towards the end of the Budget speech.
"Organised labour must embrace and act on behalf of all our country's workers - both those employed and those desperate for employment."
My colleague Robert Brand and I are fond of pointing out to students that the Budget is always political - but this one, in the context of what turned out to be misplaced expectation of major policy changes, was especially so.
The FM's main editorial was tightly focused. So it was left to an article in the FM's budget supplement to point out to its readers something that might have caused them to be less sanguine about Pravin Gordhan, for all his facing down of union pressure.
In the Budget supplement, the FM's Evan Pickworth pointed out the R6.5-billion personal income tax relief would not "evenly compensate for inflation, with those earning more than R120,000/year receiving only a 4.3% reduction - well below the annual inflation rate of 7.1%"