KZN Finance MEC welcomes MTBPS

31 October 2024 by Guest

KwaZulu-Natal Finance MEC, Francois Rodgers has welcomed the 2024 Medium Term Budget Policy Statement (MTBPS) presented by Finance Minister, Enoch Godongwana.

The Minister tabled the MTBPS in Parliament on Wednesday.

Rodgers said the budget accounts for necessary cost-containment measures, given the challenges of the national fiscus, but “ensures that essential spending areas are not comprised”.

Drawing inspiration from President Cyril Ramaphosa’s outline of priorities for the Government of National Unity, Rodgers said Godongwana asserted that government will continue to drive inclusive growth and job creation.

“The MTBPS was conservative and took into account the current economic climate. Projected economic growth at 1.1% remains weaker than ideal for a country that has a growing population such as ours.

“The infrastructure reforms, as announced by the Minister, are welcome as they bode well with government’s mission of ensuring inclusive growth, job creation as well as the building of a capable and ethical state. Government debt will reach more than R6.05 trillion, or 75.5 % of GDP [Gross Domestic Product], in 2025/26.

This as National Treasury expects improved growth prospects for the South African economy, despite slowing projected growth of some 1.1% in 2024 – down from the projected 1.3% earlier this year.

Real Gross Domestic Product (GDP) growth is projected to improve at some 1.1% in 2024, up from the 0.7% in 2023.

In the MTBPS, National Treasury said economic growth was being “weighed down by stop-start economic growth and stubborn inflation in the first half of the year”.

READ | Treasury optimistic about economic outlook
Minister Godongwana asserted that debt-service costs will reach R388.9 billion in the current financial year.

To counter this unsustainable debt increase, National Treasury has resolved to restrain spending and maintain stable tax collection.

Against the backdrop of a national debt, Rodgers welcomed the approach taken by National Treasury.

Rodgers said the biggest challenge remains the bloated government wage bill, noting this will again be a serious challenge to the fiscus as government has proposed a 4.5% wage increase but unions insist on demanding a 14% increase on salaries.

He said a clear and decisive policy needs to be implemented on addressing the challenges of the excessive wage bill.

At a recent budget council meeting, a resolution was taken that provinces would not have to face an unfunded wage agreement as in the past.

The increased wage agreement would be funded by National Treasury.

Relating to the public sector wage bill, government is expected to propose a reignition of its early retirement programme.

This, as National Treasury attempts to further reel in the wage bill.

“Over the past decade, the wage bill has decreased as a share of consolidated spending, falling from 35.7% in 2013/14 to 32.1% in 2023/24. By 2027/28, the wage bill is projected to decrease to 31.4% of consolidated spending.

“To further contain public service wage costs, government is proposing to reactivate early retirement without penalties. To support this initiative, an additional R11 billion will be allocated over the next two fiscal years. Details will be set out in the 2025 Budget,” the MTBPS said.

READ | Government non-interest expenditure expected to increase

“We also welcome the Minister’s approach to public-private partnerships as well as cooperation with the private sector. A review of government’s approach to this is expected to be tabled next month [and] this is something that we look forward to.

“At provincial and local government levels, private sector involvement remains relevant. However, investors need to see the establishment of a capable and ethical state,” Rodgers said. – SAnews.gov.za

GabiK
Thu, 10/31/2024 – 10:51

15 views