Tito Mboweni's near impossible Budget juggling act
Johannesburg - Finance Minister Tito Mboweni is under pressure to deliver a Budget that will fight the spread of the Covid-19 pandemic and cushion the poor against the rising unemployment and collapsing businesses.
This comes as economists and political parties on Tuesday said Mboweni has little room to manoeuvre, but must maintain fiscal discipline.
Health Minister Zweli Mkhize has warned Covid-19 cases would increase in the next few months, with the peak period expected in July and August.
Economist Azar Jammine, of Econometrix, said the impact of Covid-19 would depend on the increase in expenditure and assistance in social grants individuals receive.
He maintained the R500 billion stimulus package announced by the government a few months ago has already been sourced from various entities.
However, he said he did not think there will be an increase in taxes.
“Tax increases will only be done in February. What he can do is to announce the intention to increase taxes. He is also trying to limit the increase in borrowing. It's already horrific,” said Jammine.
DA spokesperson on finance Geordin Hill-Lewis said the government must start introducing structural reforms in the economy.
There were certain measures Mboweni needs to take urgently, he said.
“He must also unambiguously commit the government to a programme of fundamental economic reform to reposition our economy for growth. Without this reform, our slow decline and greater impoverishment will continue,” said Hill-Lewis.
The IFP said Mboweni must cut non-essential services on his Budget to ensure it meets the growing demand.
“What we expect of Finance Minister Tito Mboweni is that the Budget will be focused on economic recovery and job creation, while ensuring that drastic measures are taken to cut non-service delivery and non-essential line items from budgets across the board,” said the IFP in a statement.
“Indeed, this means that State-Owned Entities, such as SAA, should therefore not get any further bailouts or state guarantees. All SOEs at this time in our country's economic climate should either shape up financially or close up shop and invite private sector partnerships so as to sustain jobs and to remain competitive,” it said.
Cope spokesperson Dennis Bloem said the country is on its knees and Mboweni must present a sustainable Budget. He highlighted that they also support Mboweni’s proposal of a zero-based Budget. This would mean that every department must justify each expenditure item in its budget.
“What Minister Mboweni is saying that we must start with a zero-based Budget, we fully support that,” said Bloem.
He indicated that Mboweni would have to push the government to clamp down on corruption.
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