Opposition parties share expectations of Mboweni’s maiden budget speech

Two opposition parties, the Democratic Alliance (DA) and the Inkatha Freedom Party (IFP), shared their expectations of Finance Minister Tito Mboweni’s maiden 2019 budget speech set to be tabled on Wednesday.

The DA said Mboweni had a tough job ahead and would have to make “robust decisions necessary to hold the fiscal line”, while the IFP said it hoped the 2019/2020 budget to be tabled by the finance minister would address the “immediate, short to medium term, and long term challenges” South Africa faces.

DA MP Alf Lees said Mboweni’s budget should deal with the following key issues:

• Weak economic growth – by presenting a credible plan to boost economic growth to an average of at least 3%;
• A revenue collection shortfall – by at very least announcing the name of a new credible SARS commissioner;
• Cost containment – by providing expenditure reductions to ensure that the expenditure ceiling is not breached;
• Ballooning national debt – by providing a credible plan that will stabilise the national net debt and ensure that it remains below the 52.1% of GDP level forecast in the 2018 MTBPS;
• “Zombie” state-owned enterprises – by providing credible funding plans to deal with the cash crunches that exist at Eskom and others;
• An ever-growing list of long-term fiscal risks – such as the Road Accident Fund’s massive R206 billion excess liabilities and the uncertainty of the cost structure for a possible National Health Insurance and Fee-Free Higher Education.

The IFP’s national spokesperson, Mkhuleko Hlengwa, said the minister must focus diligently on the following:

• Education to produce the technical and innovative skills, knowledge and expertise required by the new inclusive economy and jobs market;
• Health accessibility to secure a healthy workforce to maximise productivity. This requires an injection into health infrastructure, maintenance, and a massive clean-up and renovation of existing facilities;
• Local economic development wherein new local economic niches are prioritised and beneficiated to maximise potential yield. This requires a new focus of building up local government capabilities on key areas of water, road, energy, and human settlement infrastructure planning;
• Redirected funding away from national government to provincial and local governments as drivers of economic growth and development;
• The minister will have to live up to the expectation of dealing decisively with the Eskom problem which currently stands as a national security risk while the country operates in a climate of darkness, to the detriment of growth and business;
• Generally, the budget must convincingly present a comprehensive new direction for state-owned entities, which must include but not be limited to the gradual implementation of public-private partnerships to stave off the undue burdens on an already strained fiscus in the form of endless and unsustainable bailouts;
• The challenges presented by porous borders must be confronted to combat the illicit flow of trade, goods, and people. The country is bleeding money because of poor border management to the benefit of organised crime syndicates. Moreover, the uncontrolled flow of people into the country is a burden on services, infrastructure, and national security;
• The tax regime will need to be overhauled progressively in favour of the poor and the emerging middle class, which means VAT reductions and suspending fuel taxes.
• The focus should be on the trimming of government fat and eradicate government wastage; as well as increases for top earners. Tax relief is necessary for the struggling poor and middle class;
• South Africa being a mineral-rich country needs long-term strategic planning to secure maximum production and ensure job security so as to prevent the plunge in the sectors such as gold which have seen production fall by 4.8% year on year.

Lees said Mboweni must take a “robust position” to reduce the country’s expenditure to make funds available to ensure Eskom’s lights are kept on “so that the South African economy does not collapse and will rather grow and create jobs”.

Hlengwa said Mboweni’s budget will have to provide certainty by assuring the employed of job security, the unemployed of job opportunities, and investors of a conducive environment to do business.

(Compiled Makhosandile Zulu)

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