Mboweni’s budget a step in right direction, but nation should not have to pay for SOE failures
By Sipho Mokoena
Minister of Finance Tito Mboweni tabled the 2020/21 budget last Thursday before an expectant nation.
In his introduction, the minister made an analogy of the Aloe Ferox plant that survives and thrives when times are tough. Indeed, it is true that South Africa faces many social and economic challenges but still survives. The question is for how long South Africa will survive these hardships?
The estimated revenue collection of about R1.58-trillion is promising and welcomed, but the projected spend of R1.95-trillion is disappointing to say the least.
Throttling working class
The reduction of structural high spending for programme baseline spending in order to bail out Eskom and SAA, in particular, is disappointing given the social and economic challenges faced by the country, while the proposed reduction of public service wage bill by R261-billion is also worrying.
It appears that the working class will bear the brunt of state-owned entities’ (SOEs’) mismanagement.
For instance, the working class and the poor have been forced to pay ever-increasing electricity tariffs in order to replace mismanaged funds at Eskom, and now, the working-class wage bill is to be slashed to provide a financial cushion for these failing entities.
Public service labour unions have declared war on this proposal and the ever-increasing price of food, goods and services justify this declaration.
Working class
and poor have
been forced
to pay for mismanaged
funds
The minister must be applauded for curbing perks for his cabinet colleagues and their deputies. These include limiting travel by a spouse to six domestic economy trips a year, while reducing travel tickets for private use from 30 to 20 a year.
Mboweni has shown leadership by announcing the state would no longer bear any costs in respect of security upgrades at ministers’ private residences.
However, the suspension of planning and implementation of integrated public transport network in the Buffalo City, Mbombela and Msunduzi municipalities is a step back for citizens of those municipalities given the fact that the current public transport system in those municipalities does not support fast economic growth and also poses the risk of increased road accidents due to a lack of an integrated public transport system.
The minister was also not clear on how to deal with corruption, especially the consequence management thereof.
But the investment in education, health and social development is a positive step in the right direction.
Nation needs clarity
Another shortcoming in the budget is the details and budget for the National Health Insurance. Its implementation is not clear, with a lot of people none the wiser on when it will kick off.
The proposal on the implementation of the infrastructure fund of about R10-billion is welcomed and appreciated. This might stimulate employment in the country. It is worrying that the youth employment plan is not yet in place, however, it is encouraging that the minister has promised to come up with a concrete plan in the near future.
The lowering of costs of doing business is a good proposal which might encourage the establishment of small, medium and micro enterprises and big companies to create the much-needed jobs. The allocation of R16.4-billion to settle debt and interest for SAA is unacceptable.
SAA should have been liquidated given its history of failure to make profit over a period of 10 years. It is inconceivable that this money has been allocated to pay debt instead of directing it at easing budget pressures of social impact.
In terms of tourism development, it appears the minister did not do his homework. Having said so, tourism is one of the engines that drives economic growth and creates jobs at the same time. The delays in coming up with a credible tourism plan simply slows economic growth.
There are more positive plans than negative ones in the budget speech.
It is therefore important that Mboweni honours his promises in the budget plan so that the Aloe Ferox (South Africans) is relieved from the reality of surviving under harsh conditions.
- Mokoena is an associate professor at the the Turfloop Graduate School of Leadership at the University of Limpopo.
