Picture: Phando Jikelo/African News Agency(ANA
Picture: Phando Jikelo/African News Agency(ANA

EFF calls Tito Mboweni's Covid-19 response budget 'uninspiring'

By ANA Reporter Time of article published Jun 25, 2020

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Johannesburg -  The Economic Freedom Fighters has called Finance Minister Tito Mboweni's supplementary budget tabled on Wednesday in response to the impact of the Covid-19 pandemic uninspiring.

The party added that it revealed the government had no practical plans and was not competent to grapple with the negative consequences of the health crisis.

In a virtual address to Parliament, Mboweni signalled he was moving South Africa to zero-based budgeting to contain debt which was spiralling to 81.8 percent of gross domestic product (GDP) from 65.6 percent, as the country borrowed more to plug a budget deficit expected to more than double to 15.7 percent of GDP in the current financial year.

He said the economy was now expected to contract by 7.2 per cent in 2020 from earlier forecasts of 0.9 percent growth, its largest shrinkage in nearly 90 years as a result of the Covid-19 global pandemic.

Mboweni's determination to find spending cuts of R230 billion over two years in order to stabilise South Africa's debt riled the left-leaning EFF, which said the supplementary budget was a continuation of inappropriate austerity in the face of the struggles faced by households which have worsened with the Covid-19 pandemic.

"We expected additional allocation to the budget to ensure that social grants announced as temporary measures are made permanent, in particular the basic income grant," the party said.

"Unfortunately, the legitimate and rightful call for relief fell on deaf ears."

The EFF said the special budget also failed to address much-needed intervention to assist struggling state-owned enterprises.

In a budget review accompanying Mboweni's budget speech, the National Treasury said it would allocate an additional R3 billion to the recapitalise the struggling Land Bank, but no other in-year spending adjustments were proposed for other similarly stressed state-owned companies.

African News Agency/ANA

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