Finance Minister Tables a Confused Budget from a Confused Government
24 June 2020
The budget tabled today by Finance Minister, Tito Mboweni, fell far short of the road map to developing a new economy in a new global reality.
This budget amendment is an insult to the South African people, who are enduring the hardships of declining household income. The Minister’s greatest failure lies the unwillingness to make the necessary budget cuts within government to reduce the need for international loans and allow for real measures to stimulate our economy.
While Minister Mboweni contends that debt is South Africa’s biggest problem the truth is that the ANC is South Africa’s biggest problem. The ANC has looted and mismanaged South Africa into a hole long before COVID-19 came along.
We sit with one of the largest cabinets in the world, a growth in government employees from 170 000 to 1.3 million in the past 10 years. To finance this refusal to make budget cuts, the Minister has tabled a budget with a budget deficit of R700 billion which is to be financed by taking our gross national debt from 65% in February this year to 81.8% in 2020.
As Mayor of Johannesburg, which deals with a fraction of the government fiscus, we were able to cut-back on non-essential expenditure to the tune of R2 billion. These funds were re-directed towards infrastructure and pro-poor priorities. If this can be done in Johannesburg, it can be done nationally with vastly larger sums being freed up.
Arising from the Minister’s failure to announce measures of cost-cutting of any significance, he failed to announce measures to stimulate the economy. This budget was the time for brave and decisive leadership, an announcement of a new direction to drive our economy forward and reduce the hardships of jobs losses that are certain in our future.
Perhaps where the greatest failures of the Minister’s amendment budget lie, is in what he did not say. He failed to announce where government is in the process of securing funding from the IMF and World Bank and what conditions are being attached to such loans. He continued the failures of President Ramaphosa in announcing any measures to combat fraud and corruption in government. He failed to announce fundamental reform of legislation in South Africa that is stifling our economy and the ability of businesses to grow and employ more people.
The Finance Minister failed to announce any measures to stimulate our economy, and continued to recycle the R500 billion figure of the stimulus package announced during the lockdown. We contend this has never been a stimulus package, and has only ever amounted to enhancing access to loans.
The tabling of this amendment budget demonstrated a dejected Finance Minister, restricted in his approach to the massive economic challenges we face, delivering a message he knows will not avoid the sovereign debt crisis he vividly described.
This reveals that for our country to be saved, we have to build a new alternative that can take the difficult but necessary decisions that the ANC is too divided and confused to take.
Issued by Herman Mashaba, Founder, The People’s Dialogue, 24 June 2020
