Special Report on the Budget Speech
Positive media sentiment on ‘well balanced’ Budget Speech
On 23 February, the Minister of Finance Mr Enoch Gondwana delivered his Budget Speech to members of the National Assembly. Even though more than half of the media reporting (53%) on the speech was neutral, close to 31% was positive and reinforced opinion that the budget was well balanced. That’s one of the main takeaways from a newly-released special report on the 2022 Budget Speech, by media monitoring company Novus Group.
Based on analysis of more than 1 700 clippings, the report examined the conversation drivers in the South Africa media landscape throughout February. The fuel price was one such talking point. News highlights were from reports on the growing calls for government to act quickly to deal more effectively with the fuel price in South Africa.
Rising fuel costs addressed
According to the Automobile Association (AA), a prominent source quoted in numerous articles, the government must find ways to mitigate against rising fuel costs which are negatively impacting all consumers in the country. The AA stated that one way to do this is through a review of the current fuel pricing model. In addition, the association urged the minister not to increase the fuel levies which are part of the fuel price.
The Minister obliged in his maiden speech and, for the first time since 1990, there would be no increase in the fuel or Road Accident Fund levy. This will provide tax relief of R3.5 billion to South Africans.
Income tax brackets adjusted in line with inflation rate
Generally, economists and analysts agreed that the budget was well balanced, with good news for cash-strapped South Africans. Income tax brackets have been adjusted for the second consecutive year, in line with the expected inflation rate of 4.5%. This means that if a person receives a salary increase in line with inflation, they will not go into a new tax bracket.
Sugar tax leaves a sour taste
Negative reporting (approximately 16% of coverage) revolved around sugar tax issues. Minister Godongwana was said to be encouraged to scrap the Health Promotion Levy (the ‘sugar tax’). Research has shown how much the sugar tax has already cost the country in terms of investment, contribution to GDP, and jobs. The argument in the media was that South Africa cannot afford the sugar tax at its current level and an increase in the sugar tax would be catastrophic.
“There were two significant waves of media coverage on the Budget Speech in February. Thie first, (15 to 22 Feb) the lead-up focused on the key points to watch out for. The second wave (23 to 25 Feb) was all about the response to the Minister’s speech,” says Novus Group director Joe Hamman.
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