JOHANNESBURG – Business Unity South Africa (Busa) said on Wednesday that it was disappointed at the lack of bold steps to contain government debt in the budget, saying that the budget lacked reforms to turn the tide on low economic growth.
BUSA president Sipho Pityana, in a statement, said finance minister Tito Mboweni failed to address the fundamental challenges facing South Africans and the economy.
"We previously characterised Minister Mboweni's medium-term budget policy statement in October 2018 as a reality check. This budget is a wake-up call that South Africa has run out of time," Pityana said.
"It affects all of us, and we should all be concerned. Drastic interventions are needed by the government to provide clarity on economic policy, manage government debt and contain the increasingly negative economic impact of ailing state-owned enterprises."
In his budget speech to Parliament, Mboweni said revenue in the upcoming 2019/20 financial year would amount to R1.58 trillion, against the spending of R1.83 trillion.
"That means we will spend R243 billion more than we earn. Put another way, we are borrowing about R1.2 billion a day, assuming that we don’t borrow money on the weekend," Mboweni said.
Pityana said the budget came up short on concrete steps that needed to be taken to lift the South African economy from its current prolonged slump and radically improve the investment climate.
In reference to state-owned enterprises (SOEs), Pityana said BUSA notes the annual allocation of R23 billion for the next three years to Eskom in the absence of a comprehensive, aligned position between the power utility and its stakeholders on how to effect a restructuring.
BUSA also welcomed the announcement that Cabinet will take steps to ensure that the State no longer advances guarantees to SOEs for operational purposes but pointed out that there were no proposed modalities on what form this would take.