5 things you need to know in SA business today and Mboweni's best Budget quotes
1. In the most downbeat Budget in many years, finance minister Tito Mboweni tried in vain to put a shine on a pretty bleak situation.
The 'highlights' included a pledge of R69 billion to Eskom over the next three years - despite Treasury taking a hard line on the embattled utility. It is demanding that a "chief reorganisation officer" be appointed to ensure that taxpayer money is protected as Eskom is split into three units.
President Cyril Ramaphosa, Deputy President David Mabuza, Finance Minister Tito Mboweni, Acting SARS Commissioner Mark Kingon and DG Dondi Mogajane after the delivery of the 2019 Budget Speech by Minister Mboweni during the Plenary of the National Assembly. #RSABudget2019 pic.twitter.com/Q8Sf8b1vIJ— PresidencyZA (@PresidencyZA) February 20, 2019
There was no shortage of bad news for consumers - while VAT wasn't hiked, sin taxes shot higher and a new carbon fuel tax was introduced. (In all, fuel levies will go up by 29c in the next months.) And for the first time since the early 1990s, there will be no inflationary adjustments on personal income tax rates. Which means you will pay more tax if you get a raise.
Budget 2019: you will pay taxes when you work, save, drink, spend, make a profit or die.— Michael Jordaan (@MichaelJordaan) February 20, 2019
2. The rand initially slumped to R14.35/$ following the news of the R69 billion pledge for Eskom, but by evening it recovered to below R14.00 - last trading at R14.00 as the market fully digested the budget.
Congrats @tito_mboweni and @TreasuryRSA officials on another successful #RSABudget2019 - I know of no other developing country that has this much reliable detail (1000+ pages), publicly available, on every aspect of the budget, every year. Treasury is really a national asset <3— Nic Spaull (@NicSpaull) February 20, 2019
3. Moody's - the only investment rating agency which hasn't (yet) downgraded South Africa to 'junk' - said the Budget "highlights the government’s limited fiscal flexibility amid a challenging economic environment". Moody's is scheduled to announce its ratings decision on March 29.
#SouthAfrica's #rand weakens heavily as Finance Minister #Mboweni announces a $4.9bn bailout for #Eskom -- the biggest in the nation's history -- and the largest budget deficit for a decade. https://t.co/sR23UPWQdm @MikeCohen21 @markets pic.twitter.com/ZcV3kmh9qP— Paul Wallace (@PaulWallace123) February 20, 2019
4. Tiger Brands - owner of Tastic rice, Jungle Oats, All Gold, Albany bread and other brands - has seen sales of its products rise 1% in the past four months. The company was hit hard after its polony was linked to the deadly listeria bacteria last year. After a long withdrawal, it has resumed polony sales and Tiger Brands says it has been "well received". The company, which is being sued by the families of listeria victims, said in its trading update yesterday that it had "appropriate" liability insurance. Its share price jumped 5%.
5. The South African Institute of Chartered Accountants has stripped the former VBS chairperson, Tshifhiwa Matodzi, of his registration. Matodzi won't be recognised as a chartered accountant any longer.
Mboweni's best Budget quotes
Despite having to deliver grim fiscal news, finance minister Tito Mboweni was in top form during his Budget speech and the preceding press briefing.
Here were some of his choice remarks:
On state-owned enterprises
On the Road Accident Fund
On the SABC
On rendering unto Caesar
On the president's predilection for summits
On his DG's traffic offence
Mboweni lashed out at public protector Busisiwe Mkhwebane, who published a report that recommended action against Treasury director-general Dondo Mogajane for failing to declare a traffic offence conviction. Mboweni is taking the recommendation on judicial review.
On his own pay packet
On whether he will stay on as minister of finance after the general elections
Quoting from the Bible in his Budget speech