Serious concerns were raised by opposition political parties following Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) on Wednesday.
The Inkatha Freedom Party (IFP) said the future of the country looked bleak, with an economic outlook that offered little hope.
“The issues of escalating debt, the ever-increasing cost to service this debt, and the alarming debt-to-GDP ratio are alarming signs of a government failing in its fiscal responsibilities.
“Government recently highlighted that the country does not have money, yet we are continuing to borrow money, therefore digging our country into a debt hole that will leave the young people of our nation with nothing when inheriting this economy,” IFP deputy president Inkosi Mzamo Buthelezi said.
He criticised Godongwana for failing to address one of the most pressing issues facing the nation, which was job creation.
“South Africa's unemployment crisis continues to worsen, and we have heard nothing concrete from the ANC-led government on how they plan to create jobs for our struggling citizens,” he said.
Inkosi Buthelezi said that while they welcomed the expansion of the Presidential Stimulus programme, in their view, it was not a genuine source of job opportunities but merely a political tick-box exercise. “This is simply placing a band-aid on a larger problem,” he said.
Rise Mzanzi said the range of spending cuts and budget reallocations would not help address the real crisis, “which is an economy too dependent on Chinese demand for commodities 20 years since the last commodities supercycle began”.
“The minister’s own remarks demonstrate this very point. The Chinese economy has slowed significantly, which has affected mining exports and revenues, which translates to lower corporate tax revenues for South Africa. Godongwana says as much in his speech. Even the sectors that seem to offer a glimmer of hope for organic economic growth are beset with problems,” Rise Mzansi leader Songezo Zibi said.
Zibi said that no amount of financial engineering will grow the economy, and only fresh policy thinking, better governance, and more skilled politicians and administrators will provide the basis for economic and government revenue recovery.
Brett Herron, GOOD Secretary-General, said Godongwana’s MTBPS failed to present a vision or pathway to get through the economic morass.
“There was virtually nothing in the speech to provide solace to struggling consumers. No concrete plans to address low economic growth, inflationary pressures, or the high cost of living. Instead, citizens were warned to brace for tax hikes in February, possibly including a VAT increase,” he said.
He said there was an increasing reliance on the private sector to provide public infrastructure and services.
Herron said the Minister’s remarks on the transformation of the electricity sector were positive, though a stable supply of electricity required both transmission infrastructure and supply—renewable or not.
“It would have been nice to hear from the Minister what some of these proposed reforms are, where they are, and how they might contribute to getting the wheels of our economy turning in the right direction. But vision, sadly, was missing,” Herron said.
ActionSA’s leader, Herman Mashaba, said Godongwana’s mini budget on Wednesday showed that unproductive and irresponsible spending by the ruling party had ballooned while the economy was mismanaged.
“Instead of providing new and innovative ideas to tackle the cost-of-living crises faced by millions of South Africans, Minister Godongwana’s budget will inflict more pain with steep spending cuts, planned increases in taxes of R15 billion, and below-inflation adjustments for frontline services such as healthcare, policing, and education.
“This while the minister failed to address the government’s key impediment to economic growth: the mismanagement of public money and the looting of public coffers. South Africa does not have a funding problem but simply does not get enough return on the money it is currently spending,” Mashaba said.
He said ActionSA believed that all departments should conduct an organisational audit and reprioritise funding towards frontline service delivery, including doctors, teachers, and police officers.
Mashaba suggested duplicated departments should be merged and reduced to under 20 departments.
The Freedom Front Plus (FF+) said the MTBPS confirmed that the ANC had finally run South Africa into bankruptcy.
FF+ Wouter Wessels said government debt was a runaway train, the debt burden of municipalities and public enterprises was becoming unbearable, and government's wage bill was totally out of control due to pressure from trade unions and an inflated public service.
“Decisive and drastic cost cutting is needed to save money. Some examples of needless expenditure include the security services and overseas travels of the executive authority, in particular.
“Economic growth is the only way to address unemployment and poverty, but it can only be achieved through structural reform and policy that creates a favourable environment to attract investments,“ he said.
IOL