Pretoria - The Budget speech by Finance Minister Enoch Godongwana, on the back of Covid-19’s ripple effects on the economy, should be used to share details on implementing the structural reforms needed for economic growth and job creation.
This was expressed by the ACDP ahead of today’s tabling of the Budget by Godongwana.
The party’s parliamentary whip and spokesperson on finance, Steve Swart, said: “We expect the finance minister to stick to the fiscal consolidation path to stabilise public debt, while giving details on implementing the structural reforms needed for economic growth to boost job creation and revenue collection, and to restore business and investor confidence (including the Economic Reconstruction and Recovery Plan, which focuses on infrastructure development).”
Swart said it was crucial for Godongwana to stick to the fiscal consolidation path to stabilise public debt “following one of the world’s longest and hardest lockdowns, which devastated the economy”.
He said it had always been the ACDP’s stance that the government “need to save lives and livelihoods during this Covid-19 pandemic, and look forward to the ending of the national state of disaster”.
According to him, it was crucial to stick to the fiscal consolidation path to stabilise the R4 trillion public debt and debt service costs “expected to rise from R269.2bn in 2021/22 to R365.8bn in 2024/25”.
“The commodity price tax windfall must then, as far as possible, be used to reduce public debt and the spiralling debt service costs, which is the fastest growing budgetary item, crowding out much-needed expenditure on health, education and crime prevention,” Swart said.
Swart said: “The extension of the R350 grant, which has benefited 9.5 million South Africans, will cost R50bn annually. It is doubtful, however, that the National Treasury will be able to keep funding the extension of the grant, or a possible basic income grant, from tax windfalls, which might be temporary in nature, without raising taxes.
“Caution will thus be needed when considering a basic income grant, as permanent spending commitments from short-term revenue benefits should be avoided,” he added.
But the Budget Justice Coalition said it believed that economic recovery and a pro-poor budget could co-exist.
“However, the regression in the realisation of socio-economic rights and the unequal enjoyment of the right to health, education and social assistance, cannot and should not be ignored,” the organisation said.
It called for the abandonment of austerity budgeting.
Pretoria News