Expert hails Godongwana’s approach as ‘major breakthrough’
He also cautioned: 'On the other hand, Godongwana is making real after-inflation cuts to so many social programmes, which are already underperforming.'
![Expert hails Godongwana's approach as 'major breakthrough'](https://media.citizen.co.za/wp-content/uploads/2023/11/MTBPS-Enoch-Godongwana-breakthrough.jpg)
Finance Minister Enoch Godongwana. Photo: GCIS
Although slammed by labour federation Cosatu and ActionSA for presenting a weak, disappointing and indecisive medium-term budget policy statement (MTBPS), a leading political economist praised Finance Minister Enoch Godongwana for announcing R58 billion relief to cover municipal electricity debt.
ALSO READ: MTBPS: Cutting government spending, keeping the SRD grant
University of Johannesburg political economy Prof Patrick Bond said Godongwana’s approach was “a major breakthrough”.
More dynamic economic activity
After the R254 billion Eskom bailout announced in February, there were 67 bankrupt towns that will gain from the R58 billion to settle their electricity accounts.
“I hope that means more dynamic economic activity and less pressure to disconnect poor households – although details are not yet available,” said Bond.
ALSO READ: MTBPS: Godongwana tries to tackle municipal debt, electricity and Transnet
He cautioned: “On the other hand, Godongwana is making real after-inflation cuts to so many social programmes, which are already underperforming.
“This may see a repeat of the mid-2021 social unrest, especially if he remains stingy with the R350 emergency welfare grant by failing to adjust it for inflation.”
MTBPS: Godongwana ‘failed’
Cosatu national spokesperson Matthew Parks said Godongwana failed to table “a bold MTBPS that would turn a tepid economy around, provide relief to the poor and rebuild the state”.
ALSO READ: MTBPS: worse deficit, no major bailouts, but cuts to size of government
Government, he said, delivered “an underwhelming accounting note with reckless cuts to budget allocations and below-inflation increases to departments”. South Africa would “not emerge from our crises, if we continue to stumble along a path of 0.9% and 1.4% GDP growth”.
Parks added: “Our nation is facing a myriad of very difficult challenges, ranging from tepid economic growth, 42.1% unemployment, a youth unemployment rate of 60%, endemic crime, corruption, load shedding, cable theft crippling the passenger and freight railway network; inefficient ports, dysfunctional municipalities, ingrained poverty and inequality.
“The solutions offered by Treasury of slashing expenditure and further decapacitating the state in an economy desperately in need of stimulus will choke the economy and weaken already enfeebled public and municipal services.”
ALSO READ: MTBPS: Unions set to complain, with business asking for cuts
ActionSA president Herman Mashaba said the MTBPS would “hurt the poor and escalate the cost-of-living crisis”.
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Squeeze on services
The cuts announced were:
- Basic education cut by R1.7 billion;
- Higher education cut by R2.9 billion;
- Health cut by R1.5 billion.
- Social development cut by R2.1 billion;
- Human settlements cut by R3.1 billion;
- Transport cut by R1.3 billion; and
- Water and sanitation cut by R880 million.
– Build One South Africa
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