Independent Online

Tuesday, June 28, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Godongwana puts some money back into pockets of people in a tough budget

Picture: Karen Sandison/African News Agency (ANA) Archives

Picture: Karen Sandison/African News Agency (ANA) Archives

Published Feb 24, 2022

Share

Cape Town - Finance Minister Enoch Godongwana has given some money back into the pockets of consumers through tax rebates, put in additional funds for students and the police will get a bigger allocation to clamp down on crime and corruption.

But opposition parties were yesterday already saying the Budget did not address some of the key challenges facing the economy.

Story continues below Advertisement

They were worried about the escalation of debt, no announcement on the basic income grant and lack of jobs for the unemployed.

Godongwana told Parliament that they wanted to reduce the government debt and cut down the deficit from 5.7% to 4.2% in the next three years.

However, Godongwana said the windfall of R182 billion in revenue collection has been due to higher commodity prices in the mining sector, and some of this money has already been used to cover for the Social Relief of Distress grant.

This was R44bn that would be used to pay the SRD grant until March next year after President Cyril Ramaphosa announced its extension two weeks ago.

The minister also said the police will get R8.7bn to cover for the July unrest that claimed hundreds of lives and dented the economy.

Godongwana, however, would not say whether the R350 grant would be extended beyond March next year.

Story continues below Advertisement

“The improved revenue performance is not a reflection of an improvement in the capacity of our economy. As such, we cannot plan permanent expenditure on the basis of short-term increases in community prices.

“To be clear, any permanent increases in spending should be financed in a way that does not worsen fiscal deficit,” said Godongwana.

He also said that they would not be giving bailouts to state-owned entities without conditions.

Story continues below Advertisement

Eskom was given money because the situation could not be avoided. He said they have spent almost R300bn in the past 13 years trying to fix Eskom instead of electricity.

They wanted to stabilise debt at 75.1% in the next three years.

“This is also the first time since 2015 that we are reducing the borrowing requirement, using some of the extra revenue we have collected.” he said.

Story continues below Advertisement

Students at universities will get an extra R32.6bn this year. The provincial departments have been given R24.6bn to pay teachers if there were shortfalls in their budgets.

Godongwana said they were not going to increase taxes but instead keep the money in the pockets of the people.

He said households and businesses were still reeling after the Covid-19 pandemic and high fuel prices.

“Now is not the time to increase taxes and put the recovery at risk. Accordingly, we have decided to keep the money in the pockets of South Africans. This budget includes R5.2bn in tax relief to help support the economic recovery, provide some respite from fuel tax increases and boost incentives for youth employment,” said Godongwana.

[email protected]

Political Bureau

Share