Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement has been clouded with mixed reaction from different sectors of society.
The Minister tabled his October Mid-term budget statement in Parliament on Wednesday.
Godongwana made key financial announcements, saying government spending has exceeded revenue since the 2008 global financial crisis.
“These rising annual budget deficits have reached an extent where the government will borrow an average of R553 billion per year over the medium term.”
The Minister also announced that municipalities will have their Eskom debts up to March 31, will be written off over a three-year period – provided they meet certain conditions.
He says R34 billion has been allocated to extend the COVID-19 Social Relief of Distress (SRD) grant by another year.
[Below is the minister’s MTBPS]
MTBPS 2023 speech _
The DA’s Dione George says the 2023 mid-term budget is another indication that the government has no effective plan to accelerate economic growth, resolve relentless blackouts, stabilise debt, reign in runaway expenditure, support vulnerable South Africans and combat corruption.
“As a consequence of slow economic growth and the irresponsible takeover of state-owned enterprises’ (SOEs) and Municipal Debt to Eskom, the Minister had no alternative but to increase borrowing, and has delayed debt stabilisation yet again,” says George.
George says the speech did not offer bold action and fails to address the urgent economic crisis facing South Africa.
The EFF say Godongwana’s mid-term budget was irrational, reckless and underwhelming.
The red berets say the speech reads like a private manifesto crafted in Sandton.
They slammed National Treasury’s alleged inability to come up with a permanent solution for the R350 grant.
“The R350 COVID-19 grant was acceptable during the hard lockdown, but it is now unsustainable as a long-term solution. South Africa needs a sustainable safety net, including a grant for unemployed graduates.”
Human rights organisation, Black Sash, has shared the same sentiments as the EFF calling for a more sustainable solution.
The organisation’s spokesperson, General Moyo, says cutting the social grant budget is an attack on the vulnerable.
He says there’s nothing to applaud in the Finance Minister’s Mid-Term Budget, adding that they will continue the fight for an increase of the R350 distress grant until a permanent basic income grant is introduced.
SAFTU, which is also behind the push for an increase of the SRD grant, has welcomed the extension.
The labour federation, however, says it wishes that the government should have taken the opportunity to introduce the proposed R1 500 Basic Income Grant.
The labour federation’s Trevor Shaku says a Basic Income Grant will not only relieve poverty, but expand production.
“There is 22.5% of the manufacturing capacity that is under-utilised partly because of demand that has collapsed by 10%. So, inducing demand can stimulate economic growth whilst providing social relief for our people.”
Shaku says the government must invest in state corporations like Eskom and Transnet to improve electricity production and transportation of goods.
Leader of Build One South Africa, Mmusi Maimane, has labelled the Finance Minister’s speech as a manifesto that lacked accountability.
“”It’s a manifesto that said to the people we’ll cancel their Eskom debts so that municipalities that were dysfunctional and do that get off scot free.”
“So that budget to me indicates a fact that we are in deep trouble as the people of South Africa. What becomes important going forward, and I am grateful there were no immediate increases in taxes and fundamentally more so I think we need to look at how we cost fuel so that we can ease that burden for consumers.”
Godogwana told Members of Parliament that the current financial year spending has been revised down by R21 billion.
He says further reductions of R64 billion in 2024/25 and R69 billion in 2025/26 are proposed.
