All eyes on Mboweni during Budget speech
Civil society groups fear austerity measures
FINANCE Minister Tito Mboweni delivers his much-anticipated Budget speech today, with the weight of expectation amid an ailing economy marked by state-owned entities (SOE) in distress, public finances under pressure, shortfalls in revenue collection and unemployment.
Mboweni took to social media yesterday, posting a picture of himself briefing President Cyril Ramaphosa on his Budget speech.
While some parties called for cuts in public expenditure, civil society groups cautioned against austerity measures which they say will deepen job losses.
There were differing views on SOEs, with some saying there should be no more bailouts and that they be partially privatised, while others wanted a plan on how to make them profitable.
Parliament’s spokesperson Moloto Mothapo said the Budget speech intends to give details of how the priorities set out during Ramaphosa’s Sona would be funded.
“It further unpacks how the funds will be allocated to the different spheres of government, departments and state entities. Parliament interrogates the allocation of funds to meet the priorities identified in the State of the Nation address and must approve the national budget, which the minister of finance tables, before it can be implemented,” Mothapo said.
Cosatu spokesperson Sizwe Pamla said they expected Mboweni to give details on the items Ramaphosa had spoken about in his Sona.
“We don’t want another Sona. “We expect a Budget speech that speaks to Sona and what the president said,” Pamla said, adding that Mboweni should respond with a plan to the auditor-general revealing that 10% of the budget has been lost through wasteful expenditure and corruption.
Pamla said Mboweni should also give a sense on whether the government has a plan of restructuring the state.
“We don’t expect an austerity budget that targets public servants, as has been the case… If they really feel they are under pressure financially, they need to talk about restructuring and rationalising the state,” Pamla said.
IFP MP Mzamo Buthelezi said his party was cautiously optimistic that Mboweni would deliver a Budget that would provide certainty to all South Africans.
“The 2020 National Budget should assure the employed of job security, the unemployed of job opportunities and investors of a conducive environment to do business,” Buthelezi said.
Buthelezi called for “real economic transformation” through growth of SMMEs and local economy. Good party secretary-general Brett Herron said the
bailout of SOEs should end, that tobacco taxes should be raised and money lost to corruption be recovered by issuing an international appeal for funds to be repatriated to South Africa.
Samwu said it expected the Budget to speak to the needs of South African workers and the ailing economy. The union said National Treasury underfunded municipalities when it allocated the Budget, resulting in some challenges for the local government sphere.
“We expect the finance minister, as the custodian of the nation’s fiscus, to announce an increase in equitable share to municipalities. We believe that such an increase will ensure that South Africans benefit from the services which are supposed to be delivered by municipalities.”
DA MP Geordin Hill-Lewis said Mboweni’s speech should address the immediate fiscal crisis characterised by the expansion of public debt, sharp decline in tax revenues, the ballooning of the public sector wages and bailouts for “zombie” SOEs.
THE berry industry is hoping Finance Minister Tito Mboweni will today make provision for increased agricultural exports and job creation, while cane growers again plead for a halt to the sugar tax.
On fuel, the AA says turning to fuel levies as a source of revenue will be dangerous and damaging, especially for the poor.
South African Berry Producers Association chairperson Justin Mudge said market access for exportable agricultural products was vital if Treasury was to meet its agricultural sector growth target.
Between 2014 and last year, jobs in the blueberry sector increased from 1 000 to 8 000, Mudge said, adding that the sector was one of the few in the country creating new jobs.
“South African blueberries, for example, have a remarkable international reputation for their quality. Our berries are in huge demand all over the world, including places where we do not yet have access such as China, South Korea, Thailand and Vietnam.
“The department’s budgetary and capacity constraints mean that it can take anywhere from 12 to 17 years for a commodity to gain access to one market.
“This is stifling both export revenue growth and employment in the sector.
“Apportioning additional funding to expand market access and fast-track the processing of export protocols is fundamental to achieving the growth the country desperately needs.
“… an investment into expanding market access has the potential to attract excellent returns for the country,” Mudge said.
Since implemented in April 2018, the sugar tax, also known as the
“health promotion levy”, has cost the sugar industry about R1.5 billion, with the cane-growing sector alone losing about 9 000 jobs in the first year, SA Canegrowers Association chairperson Rex Talmage said.
The tax is part of the Department of Health’s strategy to reduce obesity by 10% this year.
“The fact is that the sugar industry was already struggling as a result of weak protection against cheap imports, drought and plunging sugar prices.
“The sugar tax could very well be the final nail in the coffin for an industry that supports 1 million livelihoods,” Talmage said.
“If Mboweni is serious about ensuring inclusive economic growth and job creation, he will use his Budget speech to halt the sugar tax until a full socioeconomic assessment of its impact has been undertaken.
“SA Canegrowers remains committed to working with national government to ensure the sugar industry remains a long-term contributor to the South African economy and a job creator in rural areas,” he said.
The AA said two major taxes – the General Fuel and Road Accident Fund levies – comprise about 40% of every litre of fuel sold in the country.
These taxes amount to R5.59 on every litre of petrol and R5.47 on every litre of diesel.
“We have seen in the past that any increases to the fuel levies is met with a swift increase to public transport fares, including those of taxis. While a slight increase, even one in line with inflation, may not seem drastic, it has an enormous impact on the lives of consumers who rely on every cent to make it to the end of each month.
“These increases are therefore extremely harmful to the majority of citizens and should be considered an absolute last resort by the finance minister,” the AA said.