Estian Calitz

Infrastructure in South Africa: Who is to finance and who is to pay?

Against the backdrop of shifting views on the role of government in the provision of infrastructure, this paper distinguishes between the payment for and financing of the South African Governments infrastructure investment programme. The paper argues for a clear distinction between loan financing by the government for macroeconomic considerations and the benchmark approach to the financing of infrastructural projects. It presents a classification system that enables a systematic mapping of all prospective projects, with reference to considerations of efficiency and equity, and uses this system to question the governments financing strategy and identify alternatives. The Gautrain Rapid Rail project is used as a case study to demonstrate these alternatives.

Fiscal policy in the 1990s

The story of fiscal policy in South Africa during the 1990s is one of a marked turnaround. In the early parts of the 1990s, South Africa seemed to be heading for serious fiscal problems. However, by the end of a decade that was marked by a global review of the economic role of governments, a sweeping political transition, several adverse shocks to the South African economy and its reintegration into a globalising world economy.

Prudential regulation, its international background and the performance of the banks a critical review of the South African environment since 1970

The international financial crisis that emerged in 2007 and hit with full force in 2008 had its roots in the banking sector and specifically in the management of risks associated with securitised mortgages. While there were many causes for the crisis, the failure of prudential regulation is amongst the most important, and the severity of the subsequent crisis has underlined the role of prudential regulation in a modern financial system.

The Historically High Cost of Tertiary Education in South Africa

The #FeesMustFall-campaign’s main objection was against the high and rising tuition fees of higher education in South Africa. This short note investigates this assertion from a historical perspective: Are university fees more expensive than a decade or a century ago? We document historical tuition fees at one of South Africa’s premier universities – Stellenbosch University. The answer is an unequivocal yes.

Considering the efficacy of value-added tax zero-rating as pro-poor policy: The case of South Africa

ABSTRACT The use of value-added tax (VAT) zero-rating has become widely accepted internationally to mitigate the regressivity of the tax. From an economic perspective, it remains contestable whether VAT zero-rating is the most cost-effective way of targeting the poor. This article addresses some topical issues on VAT zero-rating in South Africa. We first ask whether (conceptually) zero-rating should be a consideration within the context of tax theory literature, and then quantify the impact on the poor if zero-rating was to be removed, as well as the tax revenue implications thereof. We compare the cost of VAT zero-rating with the benefit, using data sourced from the Income and Expenditure Survey 2010/11 and the Estimates of National Expenditure. Our findings show that VAT zero-rating (compared with existing social transfer programmes) is not cost-effective when targeting the poor.

Twenty-year review of South African fiscal policy: A tale of two sustainabilities

In 2014 democracy in South Africa was 20 years old. The democratic government in 1994 inherited both a high and increasing public debt/gross domestic product ratio and significant development backlogs. The government had to establish fiscal sustainability, yet also pursue development in a sustainable way. This article explores the governments performance in reconciling fiscal sustainability with sustainable development. The article shows that fiscal policy has been sustainable over the 20 years, with some risks appearing towards the end, and that the government pursued sustainable development through reallocating resources within the budget and by spending more in real terms. Three phases can be identified: 1994–2000, 2001–08 and 2009–13. However, poor service delivery and low levels of government investment during the 20 years threaten to undermine economic growth. Lower growth consequently threatens the sustainability of both fiscal policy and development, which, in turn, again undermines growth prospects. Hence, the article also identifies key future challenges.