Finance Minister Enoch Godongwana will today present his 2023 Budget Speech. Smile FM takes a look at some of the predictions, hopes and demands that political parties and organisations have for the 51st Budget Speech.
Godongwana is going to face some tough choices. This is the sentiment from ActionSA Eastern Cape Provincial Chairperson, Athol Trollip. He says when Godongwana delivers his second budget speech, eyes will fall on him to fix South Africa’s ailing fiscal environment and spark economic growth:
From Eskom to the public sector wage bill and the universal basic income grant, South Africa is facing a number of tough obstacles with which it must grapple, and the solutions will be complex and at times a bitter pill to swallow for the ANC and it’s tripartite alliance partners if we are to jumpstart our anaemic economy
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ActionSA believes one of the main issues for Godongwana to address, is how to fix the crisis at Eskom:
South African citizens are now paying dearly for ANC failures, spending more of their hard-earned money to pay more for essential services such as electricity, refuse removal and sanitation despite those services being delivered less reliably than before
Godongwana to address new solar tax incentive
A big tax measure under the spotlight is the introduction of tax incentives related to solar. President Cyril Ramaphosa promised the Finance Minister will detail this during his speech. Residents and businesses are watching how this will play out.
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GOOD’s Secretary-General, Brett Herron says South Africa faces a trio of existential crises:
The collapse of stable electricity supply, extreme and widespread poverty, and disastrous weather events resulting from climate change
Herron says the Minister must ‘prioritise spending’ to solve these issues, and at the same time, find money to build new infrastructure. The GOOD party also wants the Minister to address education and health system improvements, and transform impoverished communities into sustainable ones. Herron adds Godongwana has a ‘very long list’ of tough decisions to make:
Last week, food inflation hit a 14-year peak, with vegetables and crucial staples, such as maize meal and bread, reflecting the biggest increases. Millions of South Africans cannot provide for themselves and their families, and cannot afford to pay for essential services such as water and electricity
South Africa’s global commitments to reduce its carbon footprint must also be addressed, says Herron:
The country has an abundance of coal, some of which will continue to generate electricity (at Kusile) until 2070, but the country cannot afford to renege on, or delay, its commitments to a just transition to renewable energy. Minister Godongwana would do well to update the nation on the transition, and clarify the position with respect to grants and loans on offer by countries in the global north
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Taxes
The Budget Speech is the main platform that announces tax changes for the new year. Chairman of the Phangela Group, Charl Jacobs, hopes Minister Godongwana will consider introducing a tax rebate credit for ‘household private security services’:
Should such a measure be introduced alongside a framework for greater partnership for crime prevention between the SAPS and the private security sector, it could increase the pool of households making use of private security firms and in this way allow for the redeployment of existing SAPS resources to particularly under resourced and crime-stricken areas
Economists are not anticipating significant tax changes. Especially given the country’s tax base under a lot of pressure. Many say it is unlikely for there to be a VAT hike or the introduction of a wealth hike. Tax rates for personal income might not shift higher.
Finance Minister must empower the people
Tax Justice SA (TJSA) founder Yusuf Abramjee says the Finance Minister must use his Budget Speech to ’empower prosecuting authorities’. Abramjee says criminals in illicit trade are stealing R100bn a year from the citizenry:
Our National Prosecuting Authority (NPA) and Revenue Service (SARS) were hollowed out during years of State Capture to allow the ruinous looting
The nation may be focused on the electricity crisis, but ignoring the illicit trade in SA will be a costly mistake, says Abramjee:
They’ve been left ill-equipped to carry out their essential functions and this has had a devastating impact on public finances. It’s clear that urgent action is needed to restore the capacity of these institutions so they can collect the money that will improve the life of all South Africans
