“Quo Vadis SA?” Tito seems to ask the nation

Mr Tito Mboweni sworn in as Minister of Finance. Image: Flickr

THE Finance Minister, Tito Mvboweni’s maiden budget speech said it all: SA is at a crossroads.

And while there will be praise and criticism, he did seem to face the country’s problems head-on saying: “We are at the crossroads, we can either choose to go right or to go straight on the path to nowhere.”

A formidable task awaits with the R11bn backlog in outstanding VAT refunds owed by SARS, revenue under collection in the region of R60 billion in the 2018/19 budget not to mention the heavy wage increases for public servants, ‘the biggest cost pressure on the budget’.

And there is the growing cost of government’s debt servicing rising an average of 10.9 per cent and with the gross debt-to-gross domestic product (GDP) set to stabilise at 59.6 per cent by 2023, borrowing is not an option.

We can relate as we ourselves battle with our own household budgets amid rising costs.

“For ordinary South Africans, it has become a difficult time. Administered prices such as electricity and fuel have risen, unemployment is unacceptably high and poor services and corruption have hit the poor the hardest,” Mobeni said.

Unemployment statistics reveal that unemployment is at 37.2 per cent and economic growth had been revised to 0.7 per cent, from 1.5 per cent in the February 2018 Budget.

And, he said, “It’s more than a set of numbers… our performance should be measured by whether people are gainfully employed, whether our children are learning in decent schools and whether we have health care facilities that are up to standard.”

ALSO READ: 7 major considerations from the mini-budget speech 2018

Another glimpse of the work and rational minds needed for South Africa to be ‘renewed’.

There will be a growth in spending, R5.9-trillion during the next three years including R1.9-trillion on health and education, R911-million on social development and R855.2-billion on public infrastructure, of which State-owned Entities (SOEs) accounted for R370.2-billion.

The amount of R32.4-billion is available for the next three years; R15.9-billion for ‘faster spending infrastructure programmes’, clothing and textile incentives and the Expanded Public Works Programme (EPWP). The R1.7-billion for infrastructure spending has been allocated for school infrastructure (the aim is to replace the pit latrines with proper facilities).

The amount of R3.4-billion has been set aside for drought relief and upgrading water infrastructure. SAA receives a whopping R5-billion through a special appropriation.

“South Africa’s budgets for social and economic services are substantial, but the quality of spending is in many areas unacceptably poor, undermining (and in some cases collapsing) service delivery. Poor governance – reflected in inefficiency, corruption and financial mismanagement – reduces the impact of spending and increases pressure on the budget.”

That we know.  And, he adds that South Africans ‘feel the pain of poorly performing municipalities, potholes, broken street lights, roads that flood when it rains and challenges with electricity’

.He also mentioned the effect of greed and corruption and said there are cases where projects have been manufactrued, contracts awarded corruptly and construction costs are inflated.

ALSO READ: These are the items that will be zero-rated for VAT

He said the National Treasury will work with the Department of Cooperative Governance and traditional Affairs to deal with the financial misconduct in all spheres of government.

On the plus side, from 1 April 2019 government will zero rate sanitary pads, bread flour and cake flour and tax will not be increased next year? We will see. Action taken will be the proof of the proverbial pudding.


The Minister in the Presidency Responsible for Women, Minister Bathabile Dlamini, has lauded the mid-term policy statement delivered by the Finance Minister, MP Tito Mboweni.

Following the address, Minister Dlamini said that “the policy statement demonstrates a profound commitment by the government to transform the quality of the lives of the poor.”

“As we realise the President’s vision of Thuma Mina, and as we rebuild our country under a difficult economic and fiscal environment, it is imperative that women take precedence in all our decisions. If the Presidency is to achieve its vision of a society that realizes the socio-economic empowerment of women and the advancement of gender equality, the path we take towards faster and more inclusive economic growth must be premised on a principle of gender-responsive budgeting,” commented the Minister.


Mboweni digging us out of state capture holes – OUTA

OUTA welcomes most of Minister Mboweni’s mid-term budget but is disappointed at another SAA bailout and the insistence on retaining the failed e-toll scheme

The Organisation Undoing Tax Abuse (OUTA) welcomes the bulk of Minister Tito Mboweni’s mid-term budget as a laudable attempt to tackle South Africa’s financial crisis and clean up the mess left by the Zuma administration.

“This is an economy-stimulating, corruption-fighting speech that recognises the need to deal with declining governance and malfeasance across all levels of government and the reprioritisation of R50 billion for infrastructure projects without increasing expenditure,” said OUTA CEO Wayne Duvenage.

“We welcome the promise to tackle the water problems and leadership capacity issues in municipalities, as well as the Vaal River debacle. Water availability and quality are crucial issues, as is the collapse of many local municipalities.”

“This budget offers no solution to the failed e-tolls project, other than to reshuffle an extra R5.75bn to pay Gauteng Freeway Improvement Project debts,” said Duvenage.  “Government’s insistence on pushing e-tolls as an efficient user-pays scheme, when it is the worst performing all-electronic tolling schemes in the world, has become a desperate farce that Government must now come to terms with. The Finance Minister’s e-toll statement is in direct conflict with the resolution of the Gauteng ANC as well as those living in the economic hub of the country.”

Finance Minister Delivers Weak Budget Statement – IFP

Today’s medium-term budget statement presented by Finance Minister, Tito Mboweni in parliament was a missed opportunity to address the challenges our economy faces – it was weak, lacked substantive measures on debt servicing costs and he presented nothing new on improving State Owned Entities (SOEs) and strengthening accountability measures across the board.

On the implementation of the President’s Stimulus Package, the Minister failed to provide substantive details and very little focus was placed on the National Development Plan, thus, this recovery plan exists in a complete vacuum.

We further note the following with serious concern:

There are no contingency reserves – funds have all been used up – Should our country face a major disaster – or an emergency – we will not be able to fund relief efforts or meet demands thereof;

SOEs helped through bailouts and not through proper management and no consequences:

ESKOM – R350 billion government guarantee facility – R255 billion used – R35 billion has been approved for specific funding instruments;

DENEL – 5 years of government guarantees to the amount of R3.4 billion – R2.8 billion have already been used – they will now struggle to settle maturing debt;

SAA – R19.1 billion guarantees – R 14.5 billion has already been used and now SAA requires an additional R5 billion from taxpayers funds.

SANRAL – R38.9 billion in government guarantees – an additional R5.8 billion allocated to SANRAL in 2018/19 financial year.

RAF – The RAF’s operational deficit in 2017/18 declined to R26 billion from R35 billion in 2016/17 – despite 30c increase to RAF levy in the 2018 budget – The funds’ liability is expected to grow to R393 billion by 2020/21 from R206 billion at present (2018) – RAF to require further increases to the fuel levy in each of the next three years to manage short-term liability.




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Michelle Dennis

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