Budget Centred on Bold Economic Reform and Private Sector Participation

Dear Editor

The Democratic Alliance entered the Government of National Unity with a core focus on economic growth and job creation. Today’s Medium-Term Budget Policy Statement (MTBPS) by Finance Minister Enoch Godongwana attests to our influence in guiding policy and our unwavering commitment to South Africans.

The 2024 MTBPS contains numerous measures that the DA has long fought for, which we welcome. It lays the groundwork for sorely needed economic reforms, unlocking our nation’s potential for job creation and sustainable economic growth. We are finally focussing on infrastructure investment instead of ever-escalating spending with little to show for it.

The main takeaways from the Budget are as follows:

• A plan to reduce government debt: Government currently spends a fifth of its budget on debt servicing costs, which reduces investment on frontline services. Our expenditure going forward will focus on frontline services and service delivery to all South Africans;
• No more bailouts: Following hundreds of billions of rands gone to delinquent SOEs, a red line has finally been drawn. Government will no longer pump dwindling tax revenue into failed parastatals; it will spend citizen’s hard-earned money on delivering quality services to all, with a focus on building towards the future.
• Embracing the private sector as a partner: For too long, Government has had an antagonistic relationship with the private sector, which is the true engine for economic growth. The private sector with its capabilities to spur our economy will now hopefully work hand-in-hand with Government, not at Government’s whims.
• ⁠No new taxes and finally ending e-tolls: Since inception, we have stood against unfair taxation on motorists. With this budget, e-tolls are now firmly replaced with national fiscus and the Gauteng fiscus covering the cost of the highways of South Africa’s economic heart. Our taxes are already too high, and they will not rise further.
• Bold structural reforms: This Budget seeks to break Eskom’s monopoly, especially in electricity generation which will not only guarantee energy security, but also lower dependency risk and costs for consumers. This Budget also opens third party access to freight rail, greatly easing trade for the private sector. Farmers and miners will be able to place their produce on the national rail network over time. The budget also has a plan to deal with municipalities failing to provide basic service delivery, like water and sanitation. In short, the DA is relieved to see the reforms we’ve been paying lip service to for years.

Today’s announcement is good news, but we will monitor the implementation of these measures closely. We will ensure sustainable economic growth and real job creation for all South Africans. We also need to see a hard fiscal rule implemented in law, in addition to our three year fiscal anchor. *A hard fiscal rule legislated into law will ensure we do not move backwards.*

While today’s announcement marks a new chapter in South Africa’s economic trajectory, we have called for these reforms for more than a decade. We have, since the 2008 financial crisis, called for limits on government debt, as well as measures to attract foreign direct investment. To the millions of South Africans that stood in queues to vote DA on May 29: this Budget is a testament to our tireless work in Government and our work in opposition before that. We will continue to deliver more.

Regards

Wendy Alexander MP
DA Spokesperson on Finance