Tito has many balls to juggle in Covid-19 emergency budget

Finance Minister Tito Mboweni will deliver his most difficult budget tomorrow but should have a firm hand in terms of the country’s spending, economists say.

Mboweni is expected to table the special emergency budget tomorrow on government’s plans to bring financial relief due to the coronavirus pandemic.

The minister will tell the country how the R500 billion relief fund announced by President Cyril Ramaphosa in April will be spent.

But this will be done through the zero-based budget approach, meaning all budgets will start from scratch and each organisation and department will be allocated funds on a needs and costs basis.

This should lead to a different direction on expenditure, said economist Lullu Krugel.

“His focus will be on ensuring we meet the healthcare needs of Covid-19; looking after the basic needs of citizens, in particular the poor and vulnerable during this time; addressing the longterm financial stability of the country; growing the economy and creating jobs; and stabilising the business environment.”

“I expect him to have a very firm hand in terms of expenditure that does not contribute to the above,” Krugel said.

But what could be of concern were the “denialists” who do not want to accept that the country is in an abnormal and dire situation, said economist Professor Bonke Dumisa.

He said the recent court judgment to extend the R350 relief grant to asylum seekers and illegal immigrants was “really crazy” and would impact the budget.

“What worries me about the budget is the denialist behaviour in South Africa. People are in denial that we are in real trouble.

“[Mboweni] has got to make provisions for anyone who crosses the borders into South Africa. It is the accumulation of those wrong decisions which impact on how much you can budget.”

Mboweni was unlikely to turn to taxes since an increase in personal income tax, corporate income tax and value added tax was unrealistic, said auditing firm Deloitte.

The only viable taxing measure would be on a once-off basis such as a levy on wealthy individuals, the company said.