Africa-Press – South-Africa. While Members of Parliament (MPs) roundly welcomed Finance Minister Enoch Godongwana’s interventions on ailing parastatals and poor households in the medium-term budget, they warned of the risks if his commitment to assist in Eskom’s debt and curb the public wage bill does not go according to plan.
Godongwana tabled the 2022 Medium-term Budget Policy Statement (MTBPS) in a joint sitting of Parliament at the Cape Town City Hall on Wednesday afternoon. Godongwana announced that the Covid-19 social relief of distress grant (SRD) would be extended by a year to March 2024.
Godongwana also announced that government plans to take over up to two-thirds of the power utility’s debt of R400 billion. However, he acknowledged that the government was still in talks with Eskom’s lenders about how the transfer of this debt would be implemented.
Transnet got R5.8 billion for infrastructure repairs following damage by the KwaZulu-Natal flooding; Denel got R3.4 billion to aid it in completing its turnaround plan; and Sanral also R23.7 billion to assist it with handling its debt.
Business Unity South Africa (BUSA) said while it welcomed an increase in tax revenue, the narrowing of the budget deficit to 3.2% of GDP in 2023/24, and the maintenance of public sector wage increases to 3% as well as the R5.8 billion allocation to Transnet, President Cyril Ramaphosa’s energy plan needed a clearer and more definitive approach in the MTBPS.
“We welcome the announcement that government will take over between one-third and two-thirds of the debt and we welcome the conditions announced. However, we must say that government should have moved faster to address the structural problems at Eskom and address its structure,” said BUSA.
Business Leadership South Africa (BLSA) said while it welcomed allocations to struggling SOEs such as Sanral and Denel, there were no new measures to resuscitate South Africa’s dysfunctional ports and rail systems.
“Rather, the minister just outlined the measures that were already under way. The nearly R6 billion in extra funding Transnet is to receive will not improve the country’s transport logistics system,” said BLSA.
CEO of the Organisation Undoing Tax Abuse (OUTA) Wayne Duvenage said the allocation to Sanral was “a clear indication … that the e-tolling of the Gauteng freeways will be halted, and the funding mechanism has been shifted to National Treasury and Gauteng provincial government allocations”.
Deputy Minister of Finance David Masondo said those entities that posed a serious systematic risk to the fiscus were provided with solutions in the MTBPS as “the government cannot let these entities collapse on our watch”.
Regarding Godongwana’s announcement that a 3% wage increase would be implemented in the public service despite ongoing disputes and a strike, Masondo said Acting Public Service and Administration Minister Thulas Nxesi indicated the public service could avoid industrial action.
ANC MP Tshilidzi Munyai said clarity on the status of the e-tolls on Gauteng’s freeways made the medium-term budget a winner in his books.
“It blew my mind based on the fact that now e-tolls are going. This is a good indication and part of the work that has been happening in my province. We also welcome the strict conditions that SOEs and state organs will have on supply chain management and capacity building,” said Munyai.
DA MP Dion George said the medium-term budget was disappointing as it continued to put the government at the centre of South Africa’s economic recovery hopes instead of investing in SMMEs and entrepreneurs.
George said increasing funds to the National Prosecuting Authority to pursue those implicated in state capture was good but would go nowhere without political will.
African Christian Democratic Party MP Steve Swart said even though bailouts have always been a concern in the fiscus, the government opted to use its tax revenue windfall, which is R93 billion higher than expected in February, to reduce debt.
He said the ACDP remains hopeful for some tax relief in the February Budget Speech next year. He warned that implementing a 3% public wage increase while unions were preparing to strike would throw the medium-term projections for the public wage bill out of whack.
Cosatu parliamentary liaison officer Matthew Parks said the government should negotiate in good faith with public service unions rather than impose below-inflation increases. He asked the government to be swift in resolving the financial needs of the Post Office, SAA, and SABC.
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