Budget Response: A grants cut to pay for more bailouts
24 February 2021
The Finance Minister’s commitments to getting debt under control by 2025 and cutting the wage bill by a massive R300 billion are welcome. These are not new pledges, they were contained in the October 2020 MTBPS. Nevertheless, we are pleased Minister Tito Mboweni stuck to these targets. However, the credibility of these targets is questionable. The targets are based purely on the government’s ability to actually deliver the wage cuts they have now budgeted for. This sets up a major conflict between the ANC and public sector unions, which if lost, will result in a major fiscal and debt blowout.
But this was not the story of today’s Budget.
This was a Budget that will raise the cost of living for those South Africans who face the hardest times. It is a budget that kicks South Africans while they’re down.
As unemployment has spiked to above 42.6%, South Africans who have lost their jobs, as well as the elderly and those living on social grants, will wonder what they have done to deserve this.