Budget: top of the list issues

NHI, ESKOM AND BUDGET DEFICIT

dramatic spending cuts can only be made through job cuts – and that is very unlikely in an election year.

We need to see details of the measure of that support in the budget, and the manner in which it is linked to a general restructuring of Eskom.

If all we see is a bailout, it will be the worst possible outcome.

Moody’s has stated that any debt relief for Eskom from the government without immediate cost cuts at the utility would be credit negative.

Treasury will need to ensure that any support for Eskom is explicitly linked to it achieving cost containment.

While the costs to implement NHI would swamp the budget, we expect the Bill will outline the principles for a gradual implementation over a long period of time.

As the success of the NHI requires a vast improvement in the public health system, we would also hope that implementation is dependent on measured progress in the system.

Moody’s has stated that any debt relief for Eskom from the government without immediate cost cuts at the utility would be credit negative.

Nazmeera Moola is deputy managing director of Investec Asset Management