Mboweni's budget: Short on numbers, big on paradigm shifts?
20 February 2019
Everyone cautioned that Finance Minister Tito Titus Mboweni would not have a lot of leeway in presenting his Budget for the coming year in Parliament. He did not flash big numbers around, but he definitely made an impact. He quoted from the Old Testament no less than three times, almost as if he realised that he would need supernatural powers for the job at hand.
As with the President’s State of the Nation, it is not sufficient to look at the numbers and the allocations and the commitments. There are few surprises. If one, however, reads between the lines, a different picture emerges.
Firstly, let us note the apparent issues. The renewal of SARS was mentioned first, as revenue collection is paramount. This includes a new Commissioner in the next few weeks, a new Illicit Economy Unit and the return of the Large Business Unit. A number of increases in sin tax are about the only changes that were made. An increased fuel levy will not be popular. Eskom gets R23 billion a year to support its reconfiguration - probably just enough to service its interest on debt. Mr Mboweni also announced the tightening of the guarantee rules for SOEs. On a similar tough note, he announced that national and provincial compensation budgets will be reduced by R27 billion over the next three years. In his closing remarks he makes the comment that we have to move expenditure from wages, to the President’s Infrastructure Fund.
In aligning the budget with President Ramaphosa’s five priorities, he announces the following (amongst others):