From unemployment to boosting the economy - 5 critical points from Tito Mboweni's budget
Finance minister Tito Mboweni tabled a supplementary budget speech on Wednesday. It follows the allocation of R500bn by the government to help boost the economy amid the Covid-19 pandemic.
Here are five important takeouts from the speech:
Referring to reports from Tuesday that the unemployment rate had risen to 30.1% in the first quarter of 2020, Mboweni said the fight against joblessness was far from over.
The presidential youth employment intervention will get an additional R19.6bn on top of the R6.1bn allocated earlier this year, said the minister.
“The figures from yesterday show that unemployment is our single, greatest challenge. The economic support package sets aside R100bn for a multiyear, comprehensive response to our jobs emergency. The president’s job creation and protection initiative will be rolled out over the medium term.”
President Cyril Ramaphosa announced in April that R100bn would be spent on job security.
Mboweni said more than 4.7-million workers had benefited from the Unemployment Insurance Fund (UIF), which was paid out as a Covid-19 relief fund. The payouts, done through an online system, totalled R23bn as of mid-June.
He also praised the administration of the online system regarding efforts to combat corruption and fraud.
“We thank all involved for the upgrade, there were many individuals from the private and NGO sector who volunteered their time to assist the UIF. There are still challenges but we are confident that the team is working tirelessly to iron them out.”
Some of these challenges include technical glitches experienced by the system earlier this week. This as the department of employment & labour attempted to directly pay employees after it was alleged that some companies pocketed the payments meant for workers.
Front-line services and welfare support
R21.5bn will be allocated to the health sector and an additional R12.6bn to front-line services.
Mboweni said a further R5bn will be allocated to provinces to help schools prepare catch-up programmes. This will also be used towards social welfare support and provision of quarantine sites.
The minister said more than 18 million citizens had benefited from the temporary Covid-19 social grants, including the special relief of distress grant which is aimed at supporting those without an income.
Mboweni said these measures would be terminated in October.
“An additional 1.5 million people have received these already. To support vulnerable households an additional allocation of R25.5bn to the social development department is proposed, for a total relief package of R41bn.”
Growing the economy through infrastructure
Mboweni said high quality infrastructure is key to rebuilding a sustainable economy after the Covid-19 pandemic. He said this need was highlighted during the Sustainable Infrastructure Development Symposium of South Africa (SIDSSA), which saw experts and key players in infrastructure development consider 177 projects across public and private sectors.
“In light of these and other important initiatives, the government has already committed R100bn over 10 years towards the infrastructure fund.”