Godongwana’s budget lacked plan to deal with unemployment, poverty, inequality

Opposition parties and experts agree Finance Minister Enoch Godongwana’s budget speech – dubbed “the Eskom budget” – was a missed opportunity which lacked substance.

Delivering his 2023 budget speech, the minister failed to tick most boxes on the lists of expectations from organisations, with political economic analyst Daniel Silke saying it lacked a plan to deal with unemployment, poverty, inequality and a struggling economy.

“It’s almost as if all of those issues that have plagued us didn’t exist. Ultimately, it’s about attempting to save Eskom as a solvent state-owned enterprise and allow it to perhaps restore its position as a relatively efficient energy provider,” he said.

ALSO READ: Markets will react positively to ‘fiscal discipline’ 2023 budget contained – economists

“So this was an Eskom budget, the issues around the power utility were long coming. We’ve been talking about this for many years and this budget, under the duress of stage 6 load shedding, [he] finally came to the decision to take [control].

“Everything else paled into insignificance. The minister had limited options in addressing this particular budget, given the very weak domestic economy and extreme pressures particularly from personal taxpayers to indirect taxpayers.”

He said it did not alleviate the burden on already overtaxed citizens and “it’s not something to be happy about – government now realises people are overtaxed and therefore they cannot knock them further”.

‘Real mixed bag’

Thokozile Madonko, senior researcher at the Southern Centre for Inequality Studies at Wits University, said it was a “real mixed bag, with some progress and some concern”.

“We know the levels of inequality in our society and unemployment but, more importantly, we need to have a more realistic idea of what is possible in terms of growth,” she said.

While the continuation of the social relief of distress grant was welcomed, many would have loved to see an increase, in line with or above inflation.

“It’s a pity it’s not a commitment for the next three years, but just next year.”

RELATED: 2023 Budget: Public servants to get R45.6 billion for wage increases

Both Madonko and Silke said an above-inflation increase on social grants to at least adjust for the cost of living crisis for poorer households was in order.

“A lot of households have benefitted from this grant and we were looking forward to hearing more on the policy framework around a universal basic income grant supporting poor households in desperate need of income,” Madonko added.

She said following an acknowledgement that there was an urgent need to see a dedicated response to the real deficit in water, as well as transport services.

“And so our concern is, will we then be talking about a Transnet budget or a water budget in the coming years? Because, these are multiple crises which need to be tackled every year by government.”

‘Missed opportunity’

Democratic Alliance (DA) shadow minister of finance Dr Dion George said the budget was “yet another missed opportunity”, as it completely ignored the problem of the country’s mounting debt and, in fact, would add to it.

“To help the most vulnerable, the minister could have easily dropped fuel levies and increased the zero VAT-rated food basket. This reveals an uncaring government that is out of touch with the daily hardship of South African households,” he said.

Economic Freedom Fighters (EFF) national spokesperson Sinawo Tambo said the budget “did not present any practical, implementable and believable solutions to the current structural challenges facing South Africa”.

READ MORE: ‘Social grants hike, R350 extension not a cause for celebration’ – Black Sash

ActionSA Eastern Cape chair Athol Trollip said the underlying impediments to economic growth, such as crime and corruption and the overall decline of our freight transportation infrastructure, needed to be fixed.

“The country will be unable to achieve the required economic growth to create jobs and improve people’s lives,” Trollip said.

Congress of South African Trade Unions (Cosatu) national spokesperson Sizwe Pamla said the minister’s “uninspiring and jaded budget” was a clear indication the government had “either forgotten or abandoned” the commitments made to the people of SA.

Pamla said the national development plan set out noble objectives, including eliminating poverty, and reducing inequality and unemployment.

However, there were no clear interventions to structurally transform the economic base.