Budget 2009

By Staff Writer
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Budget 2009

Trevor Manuel, one of the worlds longest standing finance ministers may well be standing down after the next budget.

It has been a long haul and Trevor has managed to institute most of the policies that were the outcome of the Codesa negotiations.

Business was scared of the left within the now ruling party and as part of the deal the type of economic policy we have seen over the last fifteen years was a direct outcome of those negotiations.

Now Trevor has come to the end of his time and as with all things may now move on.

Whether this signals a departure from the policies that have been pursued up until now remains to be seen. There are certainly a number of rumbling disgruntled voices around economic policy, but the fact is that it is entrenched in the policy and behaviour of the ruling party in government.

A few of the financial news providers have looked at the budget story for 2009 and this is what they had to say.

Moneyweb started out by noting that the budget speech would take place earlier than usual, on the 11th of February 2009, due to the early closing of parliament this year.

Traditionally Manuel delivers a vote winning budget and this one is expected to do the same. The article basically goes on to state that what they expect will be much of the same. To quote 'Fiscal discipline underpins all the conclusions reached above, and nothing less is expected of Manuel and his team'.

The big question is what will happen after Trevor is gone?

The Mail and Guardian hit it on its head with the headline 'Budget 2009: 'More of the same''. They were quoting Ernst & Young. The article looked in particular at tax cuts we could expect.

They predict a small cut in personal tax, and hold out for the possibility of a corporate tax cut. They noted that 'In the 2008/09 budget, corporates contributed 28% of revenue while contributions of individuals came in at 31%'. This means that individuals are still paying more tax than the corporations that employ them.

There are a number of dissenting views on the possible tax implications of the budget speech as pointed out by SmallCaps. Tax will either go up or go down or stay the same, in reality until the speech is delivered we won't know what will actually happen.

iAfrica carried comment that the top tax threshold may go back to 42%, Fin24said it could go higher than 40%.

Both of these quoted Ernst and Young. So where does the populism come in?

Well if you are earning in the top percentile, you don't really fit into 95% of the rest of the economy, and the tax cuts will not be for you. If you own your own company though that is where you might see the benefit.

Don't forget that the government is actively calling for Tips for TrevorJustmoney will wait and see what happens but get a savings account anyway.

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