PODCAST | Fierce contestation about Budget 2022

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In this latest episode of Eusebius on TimesLIVE, there emerges a diverse range of views about how to evaluate finance minister Enoch Godongwana’s maiden national budget.

Treasury director-general Dondo Mogajane argued there are many “stakeholders” to whom he must answer, which requires a delicate balancing act when drawing up the budget.

He defended the inherently difficult choices government had to make between ensuring debt does not balloon further, which would be unfair on future generations who would inherit such debt, and at the same time collecting and spending tax money (and borrowed loans) on critical areas of governance, including health, education and other social services and public goods.

Economist Dr Thabi Leoka argued it is not sustainable to have almost half the population on grants, and said the state ought instead to do better creating an environment genuinely conducive to the private sector doing business more easily so they could create jobs. The core government role in that scenario, she argued, is to regulate big business by ensuring there is compliance with all national laws so business does not renege on its duties as part of the social compact.

Prof Michael Sachs showed sympathy for the director-general’s description of the competing interests to which the state must answer, and suggested it is crucial to have broad consensus about a national goal we can all rally around so we focus on achieving it. He disagreed strongly with Leoka about the extent to which the private sector has contributed to the elimination of structural weaknesses in the economy, arguing they have essentially focused on servicing wealthy South Africans, deepening an already unsustainable divide in society.

All the interlocutors agreed, however, that the GDP growth forecasts for the next few years, at about 1.8%, are not sufficient for the economy to deliver on the state’s constitutional obligations towards citizens. That said, they cautioned against putting the budget on trial for policy and implementation weaknesses that are the duty of all of government to pay attention to, and to fix with haste.

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