DA MP Dion George said it was time to enable South Africans to become independent of Eskom. File photo
DA MP Dion George said it was time to enable South Africans to become independent of Eskom. File photo

Opposition calls for fiscal consolidation ahead of Medium Term Budget Policy Statement

By Mayibongwe Maqhina Time of article published Nov 9, 2021

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THE DA says it is expecting Finance Minister Enoch Godongwana to provide a pathway towards a post-pandemic economic recovery when tabling his medium term budget policy statement (MTBPS) on Thursday.

Briefing the media yesterday, the DA’s Dion George said their core expectations included acceleration of the post-pandemic economic recovery, reducing gross national debt and managing expenditure, supporting the vulnerable, committing to no tax increases and leveraging pension fund assets.

George said Godongwana’s first MTBPS would be a key determinant of the pace at which the country’s post pandemic economic recovery would unfold.

“Structural weaknesses in the economy severely constrain our ability to emerge from the devastating effects of the pandemic. Without an acceleration in economic growth, the rate of unemployment will spiral upwards and GDP growth will remain tepid at best.”

He also said the greatest barrier to economic growth remained the government’s inability to provide a reliable power supply.

“Power failures are costing our economy in excess of R100 billion per annum. Eskom remains on the brink of collapse, with outdated infrastructure and budget overruns in excess of R300 billion at Medupi and Kusile power stations.”

George said it was time for National Treasury to enable South Africans to become independent of Eskom through a 100% solar power rebate.

He also said urgent steps needed to be taken to stimulate economic activity, especially in the small, medium and informal sectors.

George said it was imperative that Godongwana set the country on a path of continued fiscal consolidation, sustainable public debt management and accelerated structural economic reform.

“In order to ensure that this resilience building focus is sustainable, it is important that South Africa urgently addresses its twin challenges of a high debt burden and stubbornly low economic growth rates.”

He said there should be targeted spending cuts and priority spending while still protecting essential social spending and frontline staff wages.

“The DA’s proposed cuts to the public wage bill will yield R116,7 billion over the medium term expenditure framework.

“Additional revenue and savings amounting to R30,1 billion can be realised from items that include, but not limited to, VIP blue light security, shutting down the NYDA and auctioning digital spectrum.”

George also said the there should be a provision to cushion the poor and vulnerable against inflationary pressures.

“A clear effort must be made to protect social spending by increasing direct social support to the poor,” he said, adding the DA did not support a permanent expansion of the grant system at this stage.

He also said his party would not support tax increases or any new taxes.

“The DA expects Minister Godongwana to provide finality on e-tolls, especially how the bonds that were used to build the Gauteng Freeway Improvement Project (GFIP) will be settled.

“We remain guided by our long held position that the obligation to repay these bonds should not be passed on to road users nor should it be financed through a state bailout.”

George said Godongwana should take a bold step and ring-fence a portion of the fuel levy to pay for e-tolls.

He added the DA was expecting some major announcement on pension fund reforms.

“The minister in his MTBPS should strike a balance between allowing pension fund members to leverage their asset in the form of a loan, a pre-retirement partial withdrawal and the preservation of pension funds as a long term investment vehicle.”

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POLITICAL BUREAU

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