Philip Copeman

Author and Activist

An Accountants guide to The South African Budget

Philip Copeman

The TurboCASH Project

25 February 2021

Annual Budget 2021 to 2022


The minister opens his speech with the claim, " Today I want to leave you hopeful and outline how we will leave this economy in better shape for those who come after us."

The Ministers's claim is questionable when one sees the legacy of debt and unemployment that this budget will leave.

The Fiscal Framework

I have taken data from Minister Mbowenis Speech and prepared a draft set of management accounts. Here is a summary


Revenue, Tax

Main budget revenue is projected to be R1.35 trillion or 25.3 percent as a share of Gross Domestic Product (GDP) in 2021/22.  This rises to R1.52 trillion in the outer year (2023/24) of the Medium-Term Expenditure Framework (MTEF).


At the same time, non-interest spending will remain steady at approximately R1.56 trillion over the next three years but will decline as a share of GDP from 29.2 per cent in 2021/22 to 26.2 percent of GDP in 2023/24.

Total consolidated spending amounts to R2 trillion each year over the medium term, the majority of which goes towards social services.


With this framework, we are on track to achieve our goal of closing the main budget primary deficit. We shall achieve a primary surplus on the main budget in 2024/25. This important achievement will coincide with the end of this sixth Parliament.

Most importantly, we will stabilize government debt at 88.9 percent of GDP in 2025/26 and the ratio will decline thereafter. This is a significant improvement to the framework we presented in October last year and creates a sound platform for sustainable growth.

Economic Outlook
In this context, the South African economy is expected to rebound by 3.3 percent this year, following a 7.2 percent contraction in 2020, and an average of 1.9 percent in the outer two years.

Medium Term Spending Plans and Job Creation
Madam Speaker, my fourth reason for hope is that this Budget explicitly supports economic transformation and job creation.

I have outlined a few of the reasons we have to be hopeful but also acknowledge that much work remains to be done.

With this statement, The Minister does not directly address unemployment in the Budget Speech.

I have therefore taken the opportunity to impose Figures from Stats SA onto The Ministers medium Term Forecast and I show that this budget is leading us to an employment bloodbath. (see calculations)

Tax Policy Changes
We must advise this House that we now expect to collect R1.21 trillion in taxes during 2020/21, which is about R213 billion less than our 2020 Budget expectations. This is the largest tax shortfall on record.

Summary of the Presentation on the Fiscal Strategy 

This 2021 budget framework puts South Africa on course to achieve a primary surplus. By doing this, government debt will stabilize at 88.9 percent of GDP in 2025/26.

This would require a reduction of borrowing of 480Bn from 2024 to 2025 and would require the economy to grow organically by 10 percent in 2025 – this deduction is incoherent. This budget cannot be accepted as "putting us on course for a primary surplus."


This budget will neither put us into a stable fiscal framework nor will it deal with our horrific unemployment problem. The outcome derived by treasury defies logic. And does not "affirm our commitment to sustainable public finances."

Suggested alternatives

Whenever I comment on a budget, particularly if it is critical, I always suggest alternatives.

I have omitted to quibble about the line items of expenditure. I would exchange salaried government employees for increased grants.

The details of line expenditure are eclipsed in importance by the failure of the budget to implement structural changes. Here are proposals to correct, growth and debt.

Implement Land reform particularly restitution immediately. (willing seller)

VAT Reform. Scrap zero-rated items and make hundreds of thousands of SMEs immediately competitive in the supply of basic commodities

Scope of intervention. Stimulate wide-ranging sectors like agri-processing for GDP growth.

Revoke EWC. Will immediately increase Capital deployed (Approximately R1.5 Trillion, will increase GDP by 5 % per year.)

Cut Government salaries massively, immediately

Introduce Universal Income Grant immediately

Scrap deficit spending.

Reduce Tax rates on small business and SME employees.


Ministers Budget 2021 Speech

Labor market Data

STATSSA Quarterly Labor Force Survery

Previous Budget Reviews by Philip Copeman

Budget 2018 - I suggested that revenues would fall short of forecast and suggested similar policies to 2020

Budget 2017 – I warn that the Deficit will blow to the highest level since before Apartheid.

Budget 2016 - See how deficit financing has blown up from R 100 Bn per year to R500 Bn.

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