Several opposition parties have slammed the budget speech delivered by finance minister Enoch Godongwana in parliament on Wednesday, saying it lacked concrete plans to grow the struggling economy.
“The reality is that the economy is not growing. Even if Sars [South African Revenue Service] collects more revenue [it won’t translate to economic growth],” EFF leader Julius Malema said.
“He tried to balance the speech [because] it’s an election year. He wanted to appear reasonable especially to the public sector.”
Malema noted that Godongwana did not allocate money to the 10,000 labour inspectors President Cyril Ramaphosa spoke about during his recent state of the nation address.
“This means what the president said will not happen ... we have to allocate more money to infrastructure development and create jobs. The budget sought to impress investors and the IMF. We need to build state capacity to create more jobs, especially for young people,” Malema said.
Bosa leader Mmusi Maimane said the budget reflected signs of fiscal stabilisation as the narrowing deficit and declining debt-service costs “indicate progress in restoring financial discipline”.
“However, South Africa still has a long road ahead before citizens experience real economic relief and more opportunity. Unemployment remains the country’s entrenched challenge. Four in 10 working-age adults cannot find work. A budget that stabilises finances but fails to decisively expand employment is not yet a budget that changes lives,” he said.
Maimane said the projected economic growth rate of 1.6%-2% over the medium term was far too low: “At 1.6% growth is less than half the global average of 3.3% meaning South Africa will continue falling behind peer economies. Although debt-service costs are falling, public debt remains dangerously high at 78.9% of GDP.”
Godongwana announced that R12bn in savings had been identified over the medium term. “While we welcome targeted and responsible savings of R12bn these must be the beginning of expenditure reform,” said Maimane.
“Eliminating ghost workers, reducing the number of deputy ministers and addressing suspended officials who remain on the state payroll would free billions more for frontline services.”
ANC treasurer-general Gwen Ramokgopa said the budget gave hope, adding: “It’s a balanced budget. The projections for growth are better.”
MK party acting parliamentary leader and former finance minister Des van Rooyen said Godongwana’s projected economic growth of 1.4% had not been realised.
“Now it’s 1.6%. It’s baffling as to what informs these projections. Our people want employment so we need a growing economy. Our people want to hear how their lives are going to be improved and be part of economic activity,” Van Rooyen said.
ActionSA parliament leader Athol Trollip said the budget speech was better than last year’s. “We’re pleased there are no additional tax hikes. We’ve been calling for more funding for Sars. They collected R28bn more,” he said, adding R30bn more for the fiscus could be unlocked if the government addressed the scourge of counterfeit cigarettes and alcohol.
While he noted the economy was “stagnant”, Trollip said the party was pleased the judiciary had been allocated more money as “our courts are dysfunctional”. He stressed ActionSA would keep a close eye on how the budget was implemented.
The Border Management Authority had been allocated an additional R990m over the medium term to build capacity by filling 738 positions, with R883.8m shifted from the justice & constitutional development department to the Office of the Chief Justice, while R1bn was allocated to the police and another R1bn to the defence force to fight organised crime.
Speaking to journalists after the speech, Godongwana said: “If we do what we are talking about, effectively, the growth aspect can be higher.” He said the economic reforms could realise growth of 3.5%. This as the Business Leadership South Africa, which represents big business, recently said the country’s reform agenda remains on a positive trajectory, showing measurable progress across economic, criminal justice and governance streams.
DA finance spokesperson Mark Burke said the budget speech incorporated several DA policy positions and was evidence that the ANC no longer governed alone. The DA is part of the government of national unity.
“The DA welcomes no tax rises and no bracket creep for the first time in three years. In fact, this budget displays a wholesale rethinking of tax policy by the National Treasury under a coalition government. For the first time in 18 years, the VAT registration threshold for SMMEs has been adjusted from one to over R2m,” Burke said.
‘Significant shift’
“The DA also welcomes the upward adjustments in several other limits. These include tax exemptions for primary residences, an increase in tax-free savings account limits, turnover tax threshold increases as well as an increase in capital gains tax exclusions for individuals as well as businesses.”
Burke said the budget “signposts a significant shift for the DA. No longer is the party calling for better tax policy from the sidelines. The DA is in the room influencing national budgets”.
He said while the budget took several steps in the right direction, areas for improvement remained.
“Unemployment is unacceptably high while growth is unacceptably low. We cannot be happy with 1.6% GDP growth. This should be the bare minimum in order to stabilise GDP per capita, meaning South Africans don’t get poorer every year. We deserve better and we deserve it faster.”
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