Initial response to the Medium-Term Budget Policy Statement
1 November 2023
The Medium-Term Budget Policy Statement the Minister of Finance Enoch Godongwana delivered to the parliament today is about formalising the enforcement of a new round of budget cuts except for some minor adjustments. This follows the 30 August widely circulated leaked letter from the National Treasury imposing austerity measures on national government departments, public entities, and provincial governments.
Implemented under the notion of fiscal consolidation, the cuts affect the government’s total expenditure less debt-service costs called non-interest spending. These include net cuts of R37.3 billion and R47.7 billion in 2024/2025 and 2025/2026 financial years, respectively.
This financial year, 2023/2024, the cut amounts to R21.7 billion.
This financial year, the medium-term expenditure framework cuts municipal and provincial conditional grants by R3.4 billion and R6.2 billion respectively. The best approach, as opposed to the cuts, is to enhance governance and administrative capacity and technical expertise for municipalities and provinces to deliver and maintain infrastructure and other essential services and serve the people diligently.