With the budgets in South African households stretched to or beyond their limits, all eyes are on the ways Finance Minister Enoch Godongwana intends to balance economic growth and demands on public funds. He will on Wednesday deliver the Medium-Term Budget Policy Statement, and many hope that relieving the pressure on consumers will be at the top of the agenda.
Economist Dawie Roodt reminds citizens that the Medium-Term Budget Framework is feedback on the country’s economic performance and not another budget speech, adding that there should be not expectations of any major announcements regarding fuel levies.
However, the Western Cape Government expects the Finance Minister Enoch Godgonwana to announce ways to bring relief to citizens struggling with high fuel, electricity and general living costs, but also ensure provinces have sustainable funding to maintain frontline services.
Premier Alan Winde has suggested that Treasury rethink its current package of free basic services, as it is no longer sufficient to support indigent households.
“Among the suggestions to enhance this “Dignity Basket” are increasing free allocations of water to 10.5kl per household, moving toward a 150kWh monthly energy threshold, recognising that internet access is essential to enable job-seeking and educational advancement,” read a statement from the Premier’s office.
Winde also joined calls for Godongwana to announce ways to support intelligence-led policing.
“Safety is such a big issue for all of our residents and we are always advocating for change and new types of constitutional mandate models, and we need the Minister to indicate, in this vicinity of policy, what we can expect into the future,” said Winde.
For the South African Institute of Taxation’s CEO Keith Engel, the February Budget was a credibility budget, with the Minister keeping his promise not to raise taxes, but he noted that the Medium-Term Budget will test whether that promise can survive weak growth, a fuel cost shock and two price hikes.
At the same time, COSATU’s Matthew Parks said the Minister must, among other things, prioritise creating jobs, making electricity and fuel more affordable, increase social grants for the poor.
“This MTBPS cannot be business as usual, nor can we afford to continue to normalise the abnormal. Government must signal a bold shift to stimulate growth, rebuild public and municipal services, provide relief to workers and the poor, and give hope to the nation. It is time to end tried and failed neo-liberal austerity policies that have crippled growth. We must now invest to grow the economy and tackle unemployment.”
Meanwhile, Short-term online lender, Prime Loan Technologies, is calling on government to reform the short-term credit framework, with CEO Nita Morgan noting that outdated pricing regulations are limiting vulnerable consumers from obtaining legal loans, opting for illegal lenders instead.
“With households under growing financial pressure, access to safe, regulated is increasingly important, particularly when unexpected expenses arise. And when government’s own fiscal space is constrained, ensuring that consumers can access regulated credit becomes even more important. But the rules governing short-term lending have not been substantially revised since 2015, despite rising costs,” said Morgan.
Meanwhile, the Good Party’s Brett Herron said Godongwana must announce fuel price relief measures.
“If Minister of Finance Enoch Godongwana announces fuel price relief in his Medium-Term Budget Policy Statement, he will mitigate the impact of the global fuel crisis on struggling South African consumers, keep inflation in check, and reduce pressure on the country’s interest rates… The Minister should use the opportunity to announce a systemic review of the General Fuel Levy which in its present guise is not fit for any particular purpose and functions as a general tax,” said Herron.
Build One SA’s Mmusi Maimane said the real question is whether the Minister’s budget choices are improving the living conditions of South Africans. He says this budget framework must identify where spending should be re-prioritised.
“Overall, South Africa is in desperate need of growth. We need to invest in infrastructure that enables growth, eradicate corruption so that our economy can begin to create more jobs.”
