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"The ACDP believes that Finance Minister Pravin Gordhan will not depart radically from government's prudent, yet expansionary and counter-cyclical fiscal policy. This, we trust, will calm jittery foreign investors, who require certainty and predictability on economic policy.

We are cautiously optimistic given the gradual, yet promising estimated economic growth figures (conservatively estimated at 1, 5 % of GDP) as well as the strong rebound in VAT collections towards the end of last year. This, we believe, holds the potential for a turn-around in revenue collection, which in turn will address the budget deficit. We expect the budget deficit to be between 6 and 7 % of GDP (hopefully down from the 7.6 % for the previous 2009/2010 tax year). Rising budget deficits, which are normally funded by borrowing, are not sustainable in the long run and result in spiralling debt costs, in turn impacting service delivery and eventually tax rates. They also impact negatively on fiscal credibility and investor confidence as seen recently in the experience of Greece.

We do not expect the Minister to increase tax rates for individuals and companies to finance the budget deficit. There will, however, be limited, if any tax relief, possibly only to address bracket creep. We do expect new carbon emissions taxation, as well as steps to broaden the taxpayers' net and to improve compliance by increased penalties. There will also be the standard increases in "sin taxes" on alcohol and cigarettes.

In view of the large numbers of workers who are either unemployed or lost their jobs last year, we are expecting significant amounts to be allocated to continue stimulating economic growth, as well as to address pressing social welfare needs in the short term. The President has already alluded to the infrastructure development programme of R846bn, the extended Public Works Programme, as well as the new industrial policy to boost manufacturing capacity and create jobs.

In view of widespread unemployment and poverty, we are expecting increases in social welfare grants, as well as additional funds to extend the child grant up to the age of 18 years. Additional allocations will also be given to the five high priority areas of job creation, education, health, fighting crime and corruption, and rural development.

We expect the Minister to continue cutting down government expenditure and wastage, by reviewing programmes, addressing corruption as well as extravagant spending (R25bn has already been earmarked as savings).

Macroeconomic policy issues such as inflation targeting and the strength and volatility of the rand will also be covered be referred to by the Minister, without any radical departures from existing policy.

In view of the recent economic recession resulting in a substantial budget deficit, as well as mounting pressure on government for service delivery, this budget promises to be a true test for the Finance Minister as he balances allocating limited resources to meet unlimited needs. This, particularly in the knowledge that for the first time parliamentarians will have the power to amend his budget proposals."