Economists and politicians have given the Budget for the fiscal year a thumbs-down, saying Finance Minister Enoch Godongwana’s speech offered no surprises in projected expenditure, which included bailouts.
Godongwana delivered the 2023/2024 Budget speech in Cape Town on Wednesday, where he announced that tax revenue for the 2022/2023 period was expected to total R1.69 trillion. This exceeds the 2022 Budget estimate by R93.7 billion – a feat that will provide some relief and no tax hikes.
He also announced the government would provide R254 billion in debt relief to Eskom, with strict conditions over the next three years.
Basic Education was allocated a budget of R293.7 billion, the National Student Financial Aid Scheme will receive R50.1 billion, and transfers to universities will total R45.1 billion.
Other relief measures include an increase in social grants in line with the expected 4.9% inflation rate and the extension of the R350 Covid-19 social relief of distress grant by another year until the end of March 2024.
Excise duties on alcohol and tobacco products also increased by 4.9%.
Professor Andre Roux, the head of economics at Stellenbosch Business School, said given the limited resources and the “uncomfortably” high government debt that Godongwana was faced with, the Budget could have been worse.
“He did not do a bad job, even though the Budget is based on assumptions for economic growth. Most of the allocations were expected, especially the Eskom debt relief,” said Roux.
However, he warned that the projected 3.3 % increase on the public service wage bill could be challenged, as unions representing public servants could demand more.
The GOOD party described the Budget as a move to please those with the means, but provide little to no relief for the 18 million people living in poverty.
“This year’s budget is reasonably good for the haves in society (as there are no tax hikes and there are rebates for solar panels), but it contains slim pickings for the have-nots,” said GOOD secretary-general Brett Herron, referring to the R350 social relief of distress grant and no moves towards implementing a basic income grant.
Herron added that spending on Eskom was “unpalatable”, but necessary.
“Any rational and effective steps towards stabilising energy supply must be supported, including allocating Eskom massive funds in debt relief,” he said.
However, the provision of incentives for solar photovoltaics for households and businesses as part of the broader energy sector reforms was welcomed by Cape Town mayor Geordin Hill-Lewis.
Hill-Lewis said: “Our message to Capetonians is clear: there has never been a better time to invest in solar. We want as many residents and businesses as possible to help us end load shedding over time, as the first city in the country to offer cash for excess rooftop solar power.”
Cape Town is set to start paying businesses cash for power before June, while residents can start selling power for cash later this year.
Weekend Argus