Godongwana’s budget speech ‘another missed opportunity’ for South Africa

Political parties have rejected Finance Minister Enoch Godongwana’s budget speech, saying it was a “missed opportunity” for the country.

The Democratic Alliance (DA) said Godongwana failed to announce “meaningful structural reforms” that could drive economic growth, incentivise domestic savings, attract foreign capital, and protect vulnerable South Africans.

According to the DA, Godongwana failed to:

• Bolster domestic savings by increasing the tax free savings limits. Currently, legislation allows you to invest up to R36 000 a year, with the maximum lifetime contribution being R500 000.
• Offer solutions to revitalise state-owned enterprises or address the energy crisis. Godongwana announced the government would take over Eskom’s debt of R254 billion to restore the struggling power utility’s financial viability.
• Encourage foreign capital investment through further relaxation of exchange control.
• Alleviate the burden on overtaxed South Africans.

The DA has also slammed the minister’s announcement of bailouts for failed state-owned enterprises including the Land Bank, Post Office and SAA, saying it is “a clear misallocation of public funds”.

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“The DA firmly opposes these bailouts, as they have failed to stimulate corporate revitalisation and growth necessary to address the underperformance and financial struggles of these entities. Today, the continued bailouts expose the government’s disinterest in implementing actual structural economic reforms.”

The party, however, welcomed the minister’s efforts to bolster crime-fighting institutions, such as the National Prosecuting Authority (NPA), Financial Intelligence Centre (FIC), Special Investigating Unit (SIU), and the South African Police Service (Saps).

“Given South Africa’s likely greylisting later this week, it is imperative that these institutions’ capabilities are strengthened even further.”

‘No clear strategy’

Speaking to Newzroom Afrika, Economic Freedom Fighters (EFF) leader Julius Malema said Godongwana’s budget speech offered no clear strategy on solving the country’s problems.

“As the EFF we totally reject that budget, we think that it is not aiming at resolving the challenges that we are confronted with. And there is no clear strategy on how they are going to finance the electricity crisis that we are confronted with,” Malema said.

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‘Budget for the rich’

GOOD secretary-general Brett Herron said Godongwana delivered a budget speech “for the rich”.

“Budget 2023 tabled a budget for the rich. The tax collection windfalls and improved economic growth will please ratings agencies, but the benefits do not accrue to those most in need: the poor. No increase in the R350 poverty grant, still regarded as temporary, no Basic Income Grant.

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“The rooftop renewable energy revolution will falter. A tax rebate of R15 000 will be claimed by the rich while most of us cannot afford the upfront costs of installing a solar system. SMMEs and ordinary households will not be supported. We needed a financing scheme,” he said.

Compiled by Vhahangwele Nemakonde