Mboweni delivers 2019 budget speech
“Eskom took on the debt and it must ultimately repay it. We are setting aside R23-billion a year to financially support Eskom during its reconfiguration.”
Finance Minister Tito Mboweni delivered his 2019 national budget speech at the National Assembly, Cape Town, on Wednesday.
The minister says the 2019 budget is built on six fundamental prescripts which will not be easy to achieve because there are no quick fixes but the nation is ready for renewal.
They are centred on achieving a higher rate of economic growth, increasing tax collection, reasonable, affordable expenditure, stabilising and reducing debt, reconfiguring state-owned enterprises (SOEs) and managing the public sector wage bill.
The minister says the SOEs pose serious risks to the fiscal framework. They have received funding requests from SAA, SABC, Denel and Eskom, with several requesting state support just to continue operating.
“Isn’t it about time the country asks the question, do we still need these enterprises and if we do, can we manage them better?”
Mboweni says at the core of this plan is the subdivision of Eskom into three independent components which will set the electricity market on a new trajectory and allow for more competition, transparency and a focused funding model.
“Pouring money directly into Eskom in its current form is like pouring water into a sieve. We will not be taking on Eskom’s debt.
“Eskom took on the debt and it must ultimately repay it. We are setting aside R23-billion a year to financially support Eskom during its reconfiguration.
“Minister Gordhan and the strong team he has built at the Department of Public Enterprises will continue to exercise close and ongoing monitoring of Eskom,” he explains.
• Over R30-b is allocated to build new schools and maintain schooling infrastructure.
• An additional R2.8-b is added to the School Infrastructure Backlogs grant to replace pit latrines at over 2 400 schools.
• Over the medium term government will spend R111.2-b to ensure that 2.8 million deserving students from poor and working-class families obtain their qualifications at universities and TVET colleges.
• Government has allocated R567-b for social grant payments.
“Old age, disability, war veterans and care dependency grants will increase with R80 while the foster care grant will see a R40 increase while the child support grant will increase to R420 in April and to R430 in October,” he adds.
Mboweni explains because children are the future of the country, most of the spending goes to education and strengthening early childhood development and supporting higher education for the most deserving.
