Shortly after the long awaited 2025 Budget Speech, while US President Donald Trump is putting South Africa under the spotlight, ERSA’s hosts sit down with Dr Roy Havemann from the Bureau of Economic Research’s Impumelelo Growth Lab, to discuss the first Budget Speech under the newly appointed Government of National Unity, and his article co-authored with Claire Bisseker in the Business Day titled Make the SA Budget Predictable and Dull Again. At a time when South Africa finds itself with a debt-to-GDP ratio of 75%, declining GDP per capita, and tax revenue struggling to keep up with the mounting spending pressures, South Africans were eagerly anticipating the budget. With minutes to spare, only to be told that it would be delivered three week later because Cabinet had more to discuss. This podcast delves into the subject of contention: VAT, and whether or not an unexpected 2% point increase in South Africa’s VAT can be used to fund new expenditure items. How did South Africa’s fiscal challenges come about? How concerning is our debt and what role does the Budget play? How efficient is raising VAT to generate tax revenue, and what are the consequences on an already very unequal society? To learn about the relationship between fiscal policy and growth, how game theory can be applied to this context as well as some personal insights about our guest, listen to this podcast. It is not to be missed.
Papers mentioned in this podcast include:
- Time consistency and economic growth: A case study of South African macroeconomic policy by Christopher Loewald, David Faulkner and Konstantin Makrelov
- Taxing top incomes in the emerging world by Christopher Axelson, Antonia Hohmann, Jukka Pirttilä, Roxanne Raabe and Nadine Riedel
- Issues in the Coordination of Monetary and Fiscal Policy by Alan Blinder
- Technical background paper: The macroeconomics of establishing a basic income grant in South Africa by Roy Havemann, Hylton Hollander and Daan Steenkamp
- The macroeconomics of establishing a basic income grant in South Africa by Roy Havemann, Hylton Hollander and Daan Steenkamp
- The South African sovereign term premium and its drivers by Ruan Erasmus and Daan Steenkamp
- ROY HAVEMANN AND CLAIRE BISSEKER: Make the SA budget predictable and dull again
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