Cape Town - The costly energy crisis, alarming unemployment, especially among the youth, poverty and the rising cost of living are expected to top the agenda when Finance Minister Enoch Godongwana delivers his 2023 Budget in the Cape Town City Hall on Wednesday.
Godongwana delivers this year’s Budget speech with much anticipation on how much the government will allocate to address the power crisis, which has now been declared a national state of disaster.
He will also have to spell out how the government intends to address the looming crisis of graduates having to turn to social grants due to little to no job opportunities.
Overstretched households will watch his speech with the hope of much needed relief in light of the rising cost of living.
Economist Joseph Busha said the elephant in the room in the 2023 Budget was Eskom.
Busha expected the social grants to be aligned with inflation, a move that could make taxpayers pay more and put pressure on SARS to collect revenue.
“We need to see how that is to pan out given that there is lots of pressure in terms of revenue collection. Given load shedding, companies might collect less and it will mean less revenue that goes to the fiscus and that means less to spend.
“The balancing act is going to be tougher,” he said.
Economist Azar Jammine noted that the government made it clear that it would take some of the Eskom debt onto its balance sheet.
“The idea is that Eskom will feel less constrained in its ability to actually just manage its operations without having to worry quite as much about having to pay interest on its debt as much as before,” Jammine said.
Abe Oliver, director at UWC’s Centre for Entrepreneurship and Innovation (CEI) said many SMMEs which survived Covid were still licking their wounds while trying to weather another crisis – load shedding.
Oliver said as several sectors look to the government for a financial lifeline, special emphasis and focus needs to be placed on SMMEs which were pivotal to the success of South Africa’s economy and are the backbone of many communities.
AgriSA chief economist Kulani Siweya said: “The Budget speech must also provide for the allocation of resources to building new infrastructure and repairing existing infrastructure (especially crumbling road and rail networks) to enable the sector and value chain partners to reliably supply food across the country.
“This intervention is particularly urgent now as more than half the country’s provinces have been battered by floods with devastating consequences for farmers.
“On this score too, the State of Disaster concerning the floods urgently needs to be accompanied by sufficient funding to provide meaningful relief to the affected communities and farmers.”
Opposition parties and interest groups said Godongwana has his work cut out.
GOOD Party secretary-general Brett Herron said the country presently faced the collapse of stable electricity supply, extreme and widespread poverty, and disastrous weather events resulting from climate change.
“The minister must prioritise spending to mitigate these crises, while at the same time finding money to maintain and build new infrastructure, improve the education and health systems, fix public and freight transport, transform ghettos into sustainable communities and reduce crime,” Herron said.
The Institute for Economic Justice said it was demanding that the R350 grant be adequately resourced to meet the level of need in South Africa.
It also said the grant should be increased to the food poverty line of R663 and be provided for all those who need and are eligible for it.
IFP MP Mzamo Buthelezi said SOEs should be partially privatised.
“The fundamentals of this budget must address the fact that South Africans are unable to put food on the table as the cost of living is steadily increasing. Social relief would assist the most vulnerable.”
ACDP chief whip Steve Swart said the minister should adopt tax policies that stimulate economic growth and alleviate hardship experienced by South Africans.
Swart also said they expected details about the shifting of part of Eskom’s debt burden to the sovereign balance sheet.
Cape Times