The Medium-Term Budget Policy Statement (MTBPS) delivered by the Minister of Finance, Enoch Godongwana, addressed the country’s economic realities, which have changed drastically since the budget was tabled in February, primarily as a result of the international oil price shock.
These realities entail lower-than-projected economic growth, higher-than-projected inflation and poor service delivery. The cost of living has sky-rocketed throughout the year, with particularly the sharp rise in fuel prices hampering growth and impoverishing South Africans.
A welcome counterbalance is the higher-than-projected tax revenue, and the stabilisation of the budget deficit and associated government debt for the first time in more than a decade.
The MTBPS, revised fiscal framework and adjustments budget had to take these realities into account.
The Freedom Front Plus (VF Plus) welcomes the temporary reduction in the fuel levy, which will provide some relief, although it is not enough. February’s budget will have to offer more relief in order to bring down the cost of living and stimulate economic growth.
The announcement of a statutory fiscal anchor is welcomed. The only way to turn these dire economic circumstances around is to intensify fiscal discipline – every rand of taxpayers’ money must be spent wisely.
In the Freedom Front Plus’s view, a cause for concern is that the Minister increased government expenditure in response to the windfall from higher tax revenue, rather than building up contingency reserves.
It is vital that the increased expenditure translates into value for money and tangible contributions to the development needed for driving economic growth.
The additional R823 million allocated to the Defence Force is crucial, as more resources are needed to curb gang violence and illegal mining activities. However, these funds should be used appropriately to ensure that they deliver tangible results.
Additional funding to combat crime – through procuring more police vehicles, boosting forensic and detective services, and supporting the courts – is urgently needed and welcomed.
Whether this funding will be spent without corruption and mismanagement will determine its impact on economic growth and the country’s fiscal position.
The need for improving service delivery was highlighted – a clear indictment of the ANC for its failure at local government level – and more funding was allocated to municipalities through the division of revenue.
Unfortunately, these funds are bound to be squandered as well if accountable municipal administrations are not elected countrywide on 4 November.
If the current mismanagement and corruption prevalent in most municipalities continue unabated, these additional funds will also be wasted and bring about no improvement in service delivery.
It is, therefore, imperative that residents vote for accountability and better service delivery on 4 November. As a governing partner, the Freedom Front Plus will ensure that every cent of the public’s hard-earned tax money is put to good use.
FF+ Manifesto on Economic freedom: Promoting free-market principles and economic growth.
Burst Nibbler
Voetsek! – Go away! [foot-sak] Usually said with an angry tone when telling someone to go away or get lost. You don’t want to be saying this to a local or worse, if a local says this to you – you’ve really angered them!
Fast Flak
Fun South African Fact: The world’s largest themed resort hotel in the world – The Palace of the Lost City – is found in South Africa. Surrounding the Palace is a 25 hectare manmade botanical jungle with almost 2 million plants, trees and shrubs.