Godogwana’s budget leaves Mzansi ambivalent

February 22, 2024 65

A member of the small business community has expressed their gripe over Finance Minister, Enoch Godogwana’s lack of support for the ailing sector.

The chief risk officer of Lula, a small medium enterprise banking platform, Garth Rossiter, says the fact that the tax revenue collected for the 2023/24 tax season is lower than expected is proof that companies are struggling.

Lula is a dedicated SME banking platform that offers easy and convenient funding of up to R5 million within two hours.

Rossiter says in an environment where SMMEs continue to struggle due to load shedding, it would have been good to see more effort from the government to address their plight.

He says instead of a helping hand, they are slapped with the introduction of a global minimum tax rate on large multinationals.

Rossiter says while they understand that governments want a piece of the tax these entities generate, he’s not sure whether creating a burdensome tax will encourage big businesses to expand in South Africa.

Labour federation, SAFTU, has also bemoaned the budget, saying it was not a people-friendly, as none of the working class and marginalised poor demands were considered.

The union’s Trevor Shaku says the Finance Minister didn’t provide any concrete plan to deal with unemployment in the country, adding that the existing Presidential projects to deal with this are not a real solution.

According to Stats SA, 32.1% of South Africans were without jobs in the fourth quarter of 2023.

Rights groups, Equal Education and Equal Education Law Centre, have meanwhile raised concern over National Treasury’s decision to implement aggressive cuts to social spending.

Tabling his budget speech yesterday, Minister Godongwana allocated R324.5 billion for Basic Education for the 2024/25 financial year, with additional money to cover teachers’ salaries. He also announced Cabinet-approved reductions of R2.8 billion over the medium-term from various programmes, including the school infrastructure budget.

Equal Education researcher, Mahfouz Raffee, says this is a significant blow to the households that are reliant on government services to realise their socio-economic rights, including the right to basic education.

Yet amid the dissatisfaction, an economist at the North West University’s Business School, Professor Raymond Parsons, says Godogwana delivered a speech that gave a realistic assessment of the socio-economic and fiscal challenges confronting South Africa.

Professor Parsons says the budget recognised the overall need to slow the growth of the national debt and lower its cost with a number of measures intended to bridge the fiscal gap.

The scholar says the economic growth in South Africa has also been too low for too long and a major threat to the fiscal balance has been the lack of adequate tax revenues as a result of the persistent low growth.

He is calling for strengthening and prioritisation of the the narrative around economic growth.