The fi­nance min­is­ter de­tails a plan to ‘re­build the an­cient ru­ins’

Mail & Guardian - - News - Thalia Holmes

It’s not of­ten that Bi­ble verses and Dick­ens are quoted in the same speech, es­pe­cially when the speech is to out­line the medium-term bud­get.

But Fi­nance Min­is­ter Tito Mboweni man­aged to pull it off, cit­ing the “best of times and worst of times”, fol­lowed by Isa­iah’s call to “re­build the an­cient ru­ins”, with­out a hint of irony.

In a sim­i­lar way, Mboweni cor­ralled hu­mour and op­ti­mism in his speech, while ty­ing a firm knot in the strings of the fis­cal purse.

The word of the day was “repri­ori­ti­sa­tion”. There was sim­ply no more money to be had, he said. The 2018 gross do­mes­tic prod­uct (GDP) growth fore­cast was re­vised down­wards from 1.5% to 0.7%, the bud­get deficit would rise from an ex­pected 3.6% to 4%, and there was an ex­pected R27-bil­lion short­fall in tax rev­enue this year.

Against that fis­cally con­strained back­drop, Mboweni pro­posed eight steps to flesh out Pres­i­dent Cyril Ramaphosa’s stim­u­lus pack­age an­nounced last month.

O Eco­nomic re­forms to en­hance growth. Mboweni out­lined a need for pol­icy clar­ity to re­gain the con­fi­dence of in­vestors. “We must stop talk­ing in con­tra­dic­tory terms,” he said. In a bid to in­crease tourism, South Africa would soon of­fer 10-year, mul­ti­ple-en­try vis­i­tors’ visas. Data costs would be re­duced and data qual­ity im­proved. The re­struc­tur­ing of the elec­tric­ity sec­tor and a fo­cus on re­new­able en­ergy was un­der way, he said.

O Repri­ori­tis­ing spend­ing to sup­port growth and job cre­ation. R15.9bil­lion would be chan­nelled to in­fra­struc­ture pro­grammes to sup­port in­dus­tri­al­i­sa­tion and the ex­panded pub­lic works pro­gramme.

Fund­ing would be al­lo­cated to re­store ca­pac­ity at the South African Rev­enue Ser­vice. R14.7-bil­lion would be spent on up­grad­ing in­for­mal set­tle­ments.

O Es­tab­lish­ing an in­fra­struc­ture fund. Over the next three years, it was es­ti­mated pub­lic in­fra­struc­ture ex­pen­di­ture would be R855.2-bil­lion. Pub­lic-pri­vate sec­tor part­ner­ships would be ac­cel­er­ated to en­able in­fra­struc­ture in­vest­ment.

O Ad­dress­ing ur­gent mat­ters in health and ed­u­ca­tion. Ed­u­ca­tion, health and so­cial de­vel­op­ment would to­gether re­ceive more than 60% of non­in­ter­est gov­ern­ment ex­pen­di­ture. Pit la­trines in schools would be erad­i­cated and school­girls who can’t af­ford san­i­tary pads would be given them.

O Re­vi­tal­is­ing the per­for­mance of mu­nic­i­pal­i­ties. This year, 113 mu­nic­i­pal­i­ties adopted un­funded bud­gets, up from 83 in the pre­vi­ous year. Mu­nic­i­pal­i­ties owed more than R23­bil­lion to ser­vice providers, mainly to Eskom and wa­ter ser­vice agen­cies, Mboweni said.

“In many cases … the fi­nan­cial chal­lenges faced by mu­nic­i­pal­i­ties are a re­flec­tion of weak­nesses in gov­er­nance, or even fraud and out­right cor­rup­tion.” Au­thor­i­ties would clamp down on malfea­sance and help to guide lo­cal gov­ern­ments to per­form bet­ter.

Mboweni pro­posed other steps to free up money in an en­vi­ron­ment in which there is very lit­tle wig­gle room.

O Restor­ing good gov­er­nance and fight­ing cor­rup­tion. “We can spend our money bet­ter. Too much money goes miss­ing,” Mboweni said. The trea­sury and au­di­tor gen­eral would ramp up ef­forts to “re­duce fruit­less and waste­ful, ir­reg­u­lar and unau­tho­rised ex­pen­di­ture”. Law en­force­ment agen­cies would act against those im­pli­cated in wrong­do­ing.

O Re­form­ing state-owned en­ter­prises. Although Mboweni con­ceded that the flail­ing SAA will re­ceive an ad­di­tional R5-bil­lion this year to set­tle debt re­demp­tions, he said there should be “no holy cows”.

He called for im­proved gov­er­nance and trans­parency at the state-owned en­ti­ties.

O Pub­lic wage bill in­crease to be ab­sorbed by depart­ments. The 2018 pub­lic ser­vice wage agree­ment ex­ceeded bud­geted amounts by about R30.2-bil­lion over the medium term, he said.

“We have not al­lo­cated ad­di­tional money for this. Na­tional and pro­vin­cial depart­ments will be ex­pected to ab­sorb these costs within their com­pen­sa­tion base­lines.”

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