{"id":55838,"date":"2023-10-31T15:38:09","date_gmt":"2023-10-31T15:38:09","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget"},"modified":"2023-10-31T17:54:54","modified_gmt":"2023-10-31T17:54:54","slug":"social-unrest-warning-for-south-africa-ahead-of-mid-term-budget","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget","title":{"rendered":"Social unrest warning for South Africa ahead of mid-term budget"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa is in an unsustainable financial position, but Finance Minister Enoch Godongwana cutting expenditure too far could have serious implications for South Africa\u2019s stability. The worse-than-expected GDP will likely raise the budget deficit far higher than the National Treasury\u2019s initial forecasts.<\/p>\n

\u201cFor 2023\/24, we expect a shortfall in taxes of around R47 billion accompanied by a higher expenditure of R56 billion, pushing the deficit to 5.5% of GDP. The outcome is markedly higher than the National Treasury\u2019s target of 4%,\u201d economists at Nedbank said.<\/p>\n

\u201cThe commodity price upcycle, which led to a windfall in tax revenues last year, has turned sharply, significantly reducing corporate tax collections.\u201d<\/p>\n

In addition, the government\u2019s expenditure has been far greater than what was pencilled in the initial 2023 budget, driven by a higher-than-expected wage hike of 7.5%.<\/p>\n

Amidst this, Keith Naidoo, General Manager at Consult by Momentum, said that there is no room for any tax cuts in the Medium Term Budget Policy Statement (MTBPS), which Godongwana will announce tomorrow, 1 November.<\/p>\n

\u201cAside from the accumulative contingency reserve and allocated reserve funds of R95.2 billion between FY2023\/24 and FY2025\/26, which could cater for part of the expected expenditure overrun, the government has proposed a public sector headcount freeze, alongside the potential for outright job cuts and a halt in advertising new procurement contracts for all infrastructure projects, to address the shortfall in revenue collections,\u201d Momentum Investments economists said.<\/p>\n

However, Momentum warned that too much austerity could have dire consequences for South Africa.<\/p>\n

\u201cWith real government spending in per capita terms stagnating over the past decade, proposed austerity measures are likely to weigh more heavily on the fragile social fabric of the country. This risks an elevation in service delivery protests in the medium to longer term, in our opinion,\u201d Momentum said.<\/p>\n

Other elements of the MTBPS<\/p>\n

Looking elsewhere, Naidoo said that there is a large chance that the government will need to give bailouts to both Eskom and Transnet. This is especially the case for Transnet, which has recorded a poor financial performance, as it now contends with a leadership exodus.<\/p>\n

\u201cThe market consensus view is for T-bill issuance to play a significant role in financing the larger-than-anticipated budget deficit given the steepness of the yield curve, making T-bills a cheaper funding source relative to fixed-rate, longer-dated government bonds,\u201d Momentum said.<\/p>\n

In addition, despite next year being an election year, Naidoo said that it is unlikely that there will be any significant announcements regarding the Social Relief of Distress (SRD) grant.<\/p>\n

Updates over the SRD grant will likely only be addressed during next year\u2019s National Budget Speech.<\/p>\n

\u201cHowever, after the SRD grant lapses in March 2024, we do anticipate that it will continue in the form of a basic income grant to those living below the poverty line,\u201d Naidoo said.<\/p>\n

Finally, although the \u201cend\u201d of e-tolls was announced in last year\u2019s MTBPS, it is unlikely that there will be any updates on the process of their closure.<\/p>\n

\u201cI suspect that it won\u2019t be mentioned \u2013 but at the same time, we may be surprised. A great deal more detail is needed on government\u2019s plans for the future,\u201d Naidoo added.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africa is in an unsustainable financial position, but Finance Minister Enoch Godongwana cutting expenditure too far could have serious implications for South Africa\u2019s stability. The worse-than-expected GDP will likely raise the budget deficit far higher than the National Treasury\u2019s initial forecasts. \u201cFor 2023\/24, we expect a shortfall in taxes of around […]<\/p>\n","protected":false},"author":84,"featured_media":55837,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-55838","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nSocial unrest warning for South Africa ahead of mid-term budget - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa is in an unsustainable financial position, but Finance Minister Enoch Godongwana cutting expenditure too fa ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Social unrest warning for South Africa ahead of mid-term budget\" \/>\n<meta property=\"og:description\" content=\"South Africa is in an unsustainable financial position, but Finance Minister Enoch Godongwana cutting expenditure too fa ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-31T15:38:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-31T17:54:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1698754407.753596.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Social unrest warning for South Africa ahead of mid-term budget\",\"datePublished\":\"2023-10-31T15:38:09+00:00\",\"dateModified\":\"2023-10-31T17:54:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\"},\"wordCount\":547,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1698754407.753596.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/social-unrest-warning-for-south-africa-ahead-of-mid-term-budget\",\"name\":\"Social unrest warning for South Africa ahead of mid-term budget - 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