Easing the plight of South Africans

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.