MINISTER of Finance Tito Mboweni during the 2019 Budget speech in the National Assembly yesterday.     Elmond Jiyane GCIS
MINISTER of Finance Tito Mboweni during the 2019 Budget speech in the National Assembly yesterday. Elmond Jiyane GCIS

#Budget2019: Tito Mboweni walks a Budget tightrope

By Siyabonga Mkhwanazi Time of article published Feb 21, 2019

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FINANCE Minister Tito Mboweni’s Budget has come under fire from opposition parties in Parliament that said he failed to hold the fiscal line.

Mboweni delivered a Budget with tight spending space, high debt service costs, poor revenue collection and an increasing deficit.

But opposition parties said Mboweni should have added more eggs to his Budget basket with increased spending on social issues.

This was after Mboweni announced that Eskom will get R23billion a yearallocated over three years to the tune of R69bn. But he warned they will closely monitor Eskom’s functioning. He said there was no free lunch and Eskom will have to be supervised by an independent chief reorganisation officer.

“When I was (at a private sector company) the banks literally took the keys away from us and installed a chief restructuring officer. The chief reorganisation officer is not to work against the board or the chief executive. There is no free lunch here,” he said.

Mboweni reiterated President Cyril Ramaphosa’s stance that there will be no privatisation of Eskom.

The DA, EFF, IFP and African Christian Democratic Party said Mboweni could have done better.

DA spokesperson on finance Alf Lees said the R23bn for Eskom will be increased substantially after the May elections. He said they were concerned that debt was reaching 60% of Gross Domestic Product. “Tax revenue shortfall has grown from R27.4bn in the 2018 Medium Term Budget Policy Statement by R15.4bn to R42.8bn,” said Lees.

EFF leader Julius Malema said Mboweni was allocating money to land reform when they were busy expropriating land without compensation.

He said Mboweni should have increased corporate income tax.

IFP spokesperson Mkhuleko Hlengwa said the Budget was tough. He said they were concerned about escalating debt.

Mboweni told Parliament that Eskom’s funding requirements were huge. He also announced a revenue shortfall of R42.8bn. The Budget deficit was now at 4.3%, which is R215bn, and he warned this was not sustainable.

The government is expecting to cut the public sector wage bill by R27bn in the next three years. It wants to allow thousands of public servants to take early retirement.

Mboweni said regarding the R23bn allocated to Eskom they were not taking over its debt. “Pouring money directly into Eskom in its current form is like pouring water into a sieve. I want to make it clear: the national government is not taking on Eskom’s debt. Eskom took on the debt. It must repay it. We are setting aside R23bn a year to support it during its reconfiguration,” he said.

The support was based on the fact that Eskom must appoint an independent chief reorganisation officer who will oversee its restructuring.

Trade unions have been up in arms over plans to split Eskom into three units - generation, distribution and transmission. Mboweni said they would have to engage with the unions on the issue. Public Enterprises Minister Pravin Gordhan would work closely with him on the restructuring of Eskom which employs more than 43000 workers. The unions say there should be no job cuts. See Page 5

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