Budget speech did not lay groundwork for recovery, says think-tank IRR

Finance minister Tito Mboweni's supplementary budget speech was all talk and no action, according to the Institute of Race Relations (IRR).

“Instead of laying the groundwork for recovery, he did nothing more than pay lip service to prudent fiscal management,” the think-tank charged in a statement.

On the eve of Mboweni's budget speech on Wednesday, the institute set out measures it believed the minister could announce to get SA back to work.

These were to commit the government to “ending the ANC’s disastrous policy lockdown with immediate effect”.

It also urged him to announce that the government would slash expenditure on state-owned enterprises (SOEs), maintaining only necessary expenditure on SOEs such as Eskom to provide a measure of infrastructural stability for economic recovery.

It also said Mboweni should summon the courage to ruthlessly cut the bloated public sector wage bill.

“In this emergency budget, Minister Mboweni warned of the danger of debt, but took no steps to address it.

“He gave a strong indication of raising R40bn through increasing taxes over the next four years while failing to reduce the size of the bloated public wage bill or turn off the tax taps to failing SOEs,” said IRR deputy head of policy research Hermann Pretorius.

Pretorius said Mboweni seemed to place the country’s economic hopes on vast infrastructure expenditure with money the country simply did not have.

“You cannot borrow your way out of debt or spend your way out of insolvency,” said Pretorius.