Reactions have poured in after finance minister Enoch Godongwana’s budget speech, with political parties slamming the minister for promising to “show tough love” in the much-anticipated budget but falling short of the balancing act of addressing the country’s immediate issues and long-term expenditure plans.
The DA criticised the budget outcomes, calling it another “missed opportunity” for the country.
DA MP Dr Dion George said while Godongwana claimed bold action is necessary, there is nothing bold about this budget.
“The minister has failed to announce any meaningful structural reforms that could drive economic growth, incentivise domestic savings, attract foreign capital and protect vulnerable South Africans,” said George.
The MP lambasted the minister for ignoring the country’s mounting debt problem, in fact, adding to it.
“It offers no solution to revitalise state-owned enterprises or address the energy crisis. The minister has missed an opportunity to bolster domestic savings by increasing the tax-free savings limits, among others.
“No steps are taken to encourage foreign capital investment through further relaxation of exchange control. Neither were any steps taken to alleviate the burden on overtaxed South Africans. Instead, he has chosen to move funds away from social development programmes,” said George.
George said the DA had alternative budget moves to help the most vulnerable citizens, such as dropping fuel levies and increasing the zero-VAT rated food basket without any impact, given the tax overrun.
“He also announced no measures to cut back on unnecessary, wasteful government spending. This reveals an uncaring government that is out of touch with the daily hardship of South Africans households,” said the MP.
George also slammed the minister’s decision to announce bailouts for failed state-owned enterprises such as Land Bank, Post Office and SAA, calling it a “clear misallocation of public funds”.
“However, this pales in comparison to the mother of all bailouts — the offloading of over R250bn of Eskom’s debt onto our sovereign balance sheet. This proposal is not only irresponsible but also lacks any coherent plan to restructure Eskom and address the energy crisis.
The DA described the move as only further increasing interest payments without any incentive for Eskom to become more efficient and “firmly oppose these bailouts”.
“It is clear that the minister is more concerned with maintaining the status quo than with driving meaningful change or taking the bold action that he claims is necessary.
“They have failed to stimulate corporate revitalisation and growth necessary to address the underperformance and financial struggles of these entities. Today, the continued bailouts expose the government’s disinterest in implementing actual structural economic reforms.
George added the minister failed to mention the president’s proposed holding company for SOEs, the National Health Insurance, or the new minister of electricity.
A lot of work needs to be done on pushing back the frontiers of corruption and it was good that he made funds available for the SIU and other law enforcement agencies to execute that mandate.
— Mkhuleko Hlengwa, IFP national spokesperson
“This adds to current economic policy incoherence and promotes uncertainty. The DA will not support funding for any of these expenditures.
The only silver-lining for the opposition party was the minister’s efforts to bolster crime-fighting institutions, such as the NPA, FIC, SIU and SAPS.
The IFP called it a “safe budget”, pre-emptive and laying the foundation for the ruling party moving forward.
IFP national spokesperson Mkhuleko Hlengwa said despite this, there was no room for the minister to manoeuvre, citing little room to increase taxes when citizens are already strained.
“We have heightened inequality, heightened unemployment, so those who are able to provide for the country through taxes should do so, but we ought to be able to incentivise businesses them to recover while bearing the brunt of load-shedding,” said Hlengwa.
Hlengwa said the focus on infrastructure projects was important because it allowed government the means to foster an enabling environment for businesses to operate.
“A lot of work needs to be done on pushing back the frontiers of corruption, and it was good that he made funds available for the SIU and other law enforcement agencies to execute that mandate,” said the spokesperson.
Hlengwa called for parliamentary oversight processes to be improved after many projects were taken from parliamentary departments and moved to the presidency.
UDM deputy president Nqabayomzi Kwankwa admitted it was a difficult budget, citing that unless the minister introduced a rules-based regime on fiscal policy with effect to public debt, the country would be plunged into crisis.
“By allowing government to increase and decrease as it decides, we are continuing to steal from our children’s future to finance the current expenses, which is treasonous.”
Kwankwa slammed the solutions proposed by Godongwana as elitist, saying the incentives for citizens who install solar panels are unsustainable.
“Everyone in my village depends on social grants, who can afford solar panels? No one. This sends the wrong message, that we are elitist, only care about the middle class. Those who are established in urban areas and metros are sorted, but the poorest do not benefit from these solutions,” said Kwankwa.
ACDP leader Steve Swart said they were pleased by Sars’ ability to collect an additional R100bn above the fiscal forecast last year, saying the additional funds would be channelled to social distress relief grants.
“While there were some good interventions, we are increasingly concerned about the public debt levels. We are seeing that it is only going to get consolidated in two years’ time, which means our fiscal consolidation part is not dealing with the issues and not quick enough,” said Swart.
He added that the ACDP believed the additional funds channelled to Eskom would be properly spent, reducing load-shedding and leading to increased economic growth, resulting in more jobs and more revenue.
ActionSA acknowledged the tough choices faced by Godongwana on how to fix the ailing fiscal environment and to ignite economic growth.
Party spokesperson Atholl Trollip said despite this understanding, the choices are borne of the ruling party’s ineffectual governance of the state and the public purse, highlighting years of poor policy decisions, mismanagement and corruption.
“From Eskom to the public sector wage bill and the universal basic income grant, the country is facing a number of tough obstacles with which it must grapple. The solutions will be complex and at times a bitter pill to swallow for the ANC and its tripartite alliance partners, if we are to jumpstart our anaemic economy,” said Trollip.
Trollip added citizens are paying dearly for the ruling party’s failures, spending more of their hard-earned money to pay more for essential services such as electricity, refuse removal and sanitation despite those services being delivered less reliably than before.
Trollip expressed an urgent need to address how to fix the debt crisis at Eskom, which threatens to derail the entity’s unbundling, and has been a bottleneck for investment in the country’s transmission network, thereby limiting independent power producers’ ability to contribute generation capacity to the electricity grid.
“ActionSA believes that social grants should be a temporary measure to assist the most vulnerable in society, while long-term economic growth is what creates job opportunities and independence from these grants, and that will ignite job creation that will lift the majority of our people out of poverty,” said Trollip.
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