Enoch Godongwana makes his maiden budget speech as the new Minister of Finance. Picture: Phando Jikelo/African News Agency (ANA) Archives
Enoch Godongwana makes his maiden budget speech as the new Minister of Finance. Picture: Phando Jikelo/African News Agency (ANA) Archives

MTBPS: This is what you need to know about Enoch Godongwana’s pro-poor Budget

By Siyabonga Mkhwanazi Time of article published Nov 11, 2021

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Cape Town - Finance Minister Enoch Godongwana says he was striking a balancing act in his Medium Term Budget Policy Statement as the fiscus was facing spending pressures.

He said this was a pro-poor budget with 60% of it going to the social wage.

But loadshedding was a threat to the economy and government would have to ramp up its plan to diversify energy supply to secure more sources of energy.

The wage bill and the extension of the 350 social relief distress grant was still on top of the agenda of government.

But discussions would be finalised next year on whether to extend the grant after March. This is the deadline set by government when it extended it early this year.

Godongwana said they expected the economy to grow by 5.1% this year after it contracted by 6.4% last year.

They want to reduce the deficit from 7.8% this year to 4.9%.

He said the issue of Eskom of loadshedding has to be dealt because it was threatening the economy.

Eskom has been receiving bailouts from government to ensure it is keeping its operations up and running.

“Our first and immediate task, in this regard, must be to ensure stable energy supply, reduce the risk of loadshedding and accelerate the transition to renewable energy sources. All of our efforts over the past 13 years have been to fix Eskom, instead of addressing security of supply by adding additional capacity to the grid. We have already made significant progress in correcting this: the amendment of schedule 2 of the Electricity Regulation Act of 2006, has raised the licensing threshold from 1 to 100MW,” said Godongwana.

However, he also said they will deal with the question of the R350 grant next year. But that was the decision of government and not National Treasury.

He said National Treasury would take part in the discussions around this.

Already unions, civil society and other political parties are mounting pressure on government to extend the grant beyond March next year

The minister said many people were receiving social grants.

He said 9.5 million people received the R350 grant and this is in addition to the millions who receive other social grants.

“Today, 27.8 million South Africans are social grant recipients. This accounts for about 46% of our population,” he said, adding the number of the people who are working has dropped.

“Our total spending on the social wage is also very high. This amount has grown from R860 billion in 2018/19 to R1.1 trillion in 2021/22. Around 60% of total non-interest spending annually goes towards housing development, free basic services, employment programmes, health, education and social grants, among other things,” said Godongwana.

Social Development Minister Lindiwe Zulu said discussions were ongoing on whether to extend the R350 grant beyond March.

Godongwana also said they were looking at the restructuring of the state-owned entities.

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Political Bureau

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