Budget 2019: A budget speech of bailouts not for the people of South Africa
20 February 2019
Finance Minister, Tito Mboweni’s maiden speech reveals a major increase in the gap between revenue and expenditure that has been caused primarily by the Eskom financial crisis.
The Eskom crisis is only partly being dealt with by allocating bailouts of R23 billion each year over the medium-term totaling R69 billion. This will kick the can down the road until after the May General Election when we expect a more substantial funding of Eskom to be announced in the 2019 Medium Term Budget Policy Statement (MTBPS).
Economic growth for the 2018 year has been maintained at the 2018 MTBPS projection of 0.7% but the outer years have been revised down in 2019 from 1.7% to 1.5% through to 2021 from 2.3% to 2.1%.
For the first time post 1994 the debt to GDP level is predicted to breach the 60% level at 60.2% in 2023/24. This the tenth year in a row that the debt stabilisation has been pushed out by a further year and makes a mockery of the annual commitments from various ministers of finance to stabilise debt.