10 interventions that will change the future of SA, according to Mboweni
Finance minister Tito Mboweni has detailed changes and interventions that SA will implement to stay financially afloat during the Covid-19 pandemic.
Delivering his supplementary budget speech on Wednesday, Mboweni warned that SA could face bankruptcy if "the spending does not stop”.
Mboweni also warned that gross tax revenue collected during the first two months of 2020/21 fell short of the projected R177.3bn by R35.3bn.
“As a consequence, gross tax revenue for the 2020/21 fiscal year is revised down from R1.43 trillion to R1.12 trillion. That means that we expect to miss our tax target for this year by over R300bn,” said Mboweni.
Mboweni said the government plans to close “the gate of doom and despair” and open one that leads “to a path of prosperity”.
“Through this gate, we reduce our reliance on borrowing. We feed the hungry. We look after the sick. We educate our people. We build for the future. We spend with wisdom, and we jail those who loot,” said Mboweni.
Mboweni listed major interventions on how SA will change. Here are 10:
- The government intends to borrow about US$7bn from international finance institutions to support the pandemic response.
- R21.5bn will be set aside for Covid‐19‐related health-care spending, along with a further R12.6bn to go to front-line pandemic response services.
- Each province will receive at least R5bn, “for the education catch‐up plan, social welfare support for communities and provision of quarantine sites by public works departments and responses in other sectors.”
- R9bn will be reprioritised within allocated conditional grants to fund additional water and sanitation provision and the sanitising of public transport.
- A Covid‐19 loan guarantee scheme will be established, aimed at helping businesses which need support after the lockdown.
- The government will adopt “zero‐based budgeting” that will try to reduce all expenditure that “we thought we can no longer afford”.
- A non-negotiable principle of zero‐based budgeting will be put in place to demonstrate the value for money in Eskom.
- Government will be allocating R3bn to recapitalise the Land Bank, which holds 29% of SA's agricultural debt.
- About 177 projects across public and private sectors are being considered to develop SA's infrastructure.
- The government plans to reduce long‐term interest rates to allow business and households to drive faster economic growth.