Budget: Tito gets ANC’s backing
● The ANC expects finance minister Tito Mboweni to table a shoestring mediumterm budget that will be directed towards major infrastructure investments in a bid to boost an economy battered by Covid19.
ANC treasurer-general Paul Mashatile said this week that state coffers had been hit hard by the lockdown, which saw most industries shut, and that the ANC national executive committee (NEC) lekgotla had backed Mboweni’s belt-tightening approach as he prepares for the mini budget.
Mashatile said the lekgotla had directed the government to pursue infrastructure projects in partnership with the private sector, and that the government would engage potential funders to revive South African Airways.
The party’s support for Mboweni comes after Cosatu and its affiliates took to the streets this week to protest against corruption and called for Mboweni’s removal due to government plans to cut the public service wage bill by R160bn in the next three years.
“We have confidence in comrade Tito Mboweni. He is dealing with difficult issues. The Covid-19 pandemic has eroded our revenues badly.
“You will see that our deficit is now higher. When the minister tables the medium-term budget statement in October, he’s going to show that revenues have really declined seriously. So I don’t think comrade Tito is unreasonable when he thinks some things can’t be done,” said Mashatile.
He said the NEC lekgotla had mandated the government to direct funds to state companies Transnet and Prasa to fix railway networks, build stations and install fencing to protect infrastructure. Funds would also go to the department of water affairs for bulk infrastructure for housing projects.
The lekgotla had cautioned the government about pouring money into reviving SAA, and recommended that an equity partner be found, Mashatile said.
“We have agreed that we should revive SAA, but not only ourselves as government. We will bring in a private equity partner to partner with government to rebuild SAA. So we’re not going to let SAA die. But it’s not going to be wholly owned by the state any more. We need to channel some of the funding in rural areas where poor people are.
“So we don’t want the minister of finance to take the whole R25bn … once the minister takes the whole R25bn to SAA it means there is no money for Prasa … for the trains where the majority of our people are.”
Mashatile would not say howmuch the government would contribute, as it would depend on how the deal is structured. “If government takes 51%, it means it will put 51% of what is needed. At the moment I think negotiations will continue until the right partner agrees,” he said.
“We think private-public partnerships are the way to go. Not only with SAA, by the way. Remember what we did with Telkom? We brought in the private sector and the state reduced [its stake] to 40% — the PIC [Public Investment Corporation] is there and that gives us majority because the PIC will mostly vote with us.”
The government has also been encouraged to invite partners into the energy sector, and private players may be asked to revive old Eskom power stations, possibly also to convert some old power stations to gas.
However, there is opposition in the ANC to government efforts to partner with the private sector. Last week, some NEC members threatened to oppose plans to bring private players into Eskom and SAA, saying this was a bid to privatise state-owned entities.
Mashatile said there was no such opposition at the lekgotla, which ended on Monday. “Interestingly, the lekgotla was unanimous. No-one raised the issue of privatisation.”