/ MEDIA STATEMENT / The content on this page is not written by Polity.org.za, but is supplied by third parties. This content does not constitute news reporting by Polity.org.za.

Minister of Finance Enoch Godongwana’s Medium Term Budget Speech hit the anticipated defensive notes to mitigate cuts in government spending, but 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.

The freight logistics roadmap is promising, in theory, including bringing in the support of the private sector. Investing in, and fixing, our logistics sector is fundamental to our potential to grow. The current state of the sector is hampering exports and killing growth every day.

It’s worrying, however, that to date there hasn’t been much private sector uptake.

There’s an increasing reliance on the private sector to provide public infrastructure and services. South Africa must ensure that its financial and economic policies and plans are coherent, and implemented, or its reliance on the private sector will not deliver the hoped-for goods.

At the same time the country must take care to avoid an over-reliance on the private sector that would potentially deepen inequality and exclusion.

Arguably the greatest beneficiaries of Minister Godongwana’s speech today were municipalities that have been collecting electricity revenue from consumers but not paying their debts to Eskom.  Writing off municipalities’ debts instead of revising their funding model will, however,  likely lead to their re-offending.

The Minister’s remarks on the transformation of the electricity sector were positive, though a stable supply of electricity requires both transmission infrastructure and supply – renewable or not.

The Green Growth Strategy sounds good. Expensive as it sounds in the short-term, we don’t really have a choice but to embrace the transition to electric vehicles. It’s been an important contributor to the economic recovery and growth plans of a number of developed nations. Our automotive sector must lay the groundwork for the transition, so it is not left behind.

The Minister’s announcement of the continued funding of the Covid Social Relief of Distress Grant – the R350 a month grant – is positive. Even more so is the news that we are reviewing our total social grant system.

If we reformed the structure of our budgeting and economy, as has been promised for many years, we have calculated that we could afford to pay a Basic Income Grant of R1000 a month.

The GOOD Party has been calling for a review of the state structure, including resources committed to provincial government, and the culling of wasteful and/or irrelevant programmes and perks.

The only way to effect real change is through implementing zero-based budgeting that challenges the impact of each Rand that government spends. 

The State has been talking about economic reforms for many years. 

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. 

Issued by Brett Herron, GOOD Secretary-General & Member of Parliament