GNU’s first mid-term budget brings nothing new for poor and unemployed South Africans
30 October 2024
Build One South Africa (BOSA) joins millions of South Africans in disappointment at today’s Medium Term Budget Policy Statement (MTBPS) delivered by the Minister of Finance, Enoch Godongwana. It marked the first real test for the Government of National Unity (GNU) on whether it will pursue a meaningful shift from administrations before it.
It is now clear that government has decided to stay on the same low growth, high debt trajectory, demonstrating its inability to tackle our country’s stagnant, unequal economy and stubbornly-high unemployment rate.
Debt remains the biggest threat to our nation's future. This year we are spending R388.9 billion in interest on our national debt. This is unsustainable. Added to this, tax collection will be R22 billion lower than estimated in February’s national budget. Money is going out faster than it is coming in, and creating a surplus is not sufficient. What is required is funding for growth, with infrastructure at the centre.
The Minister made many commitments with delivery dates only months or years in the future. It appears that in order to keep peace within the GNU, completion dates for many projects have been pushed out.
While funding the education shortfall should have been first priority, the Minister chose to use the Special Appropriations Bill to allocate additional funds not to education, but to the Presidency, Justice, Transport and International Relations. South Africans must know that the GNU has now chosen larger class sizes, overworked teachers, and diminished quality of education by not adequately funding the Department of Basic Education.
On job creation, there was not a single mention of the manufacturing sector, which is highly absorptive to low skilled jobseekers. BOSA proposed the development of township manufacturing hubs as part of a broader industrial policy. This shift is critical for ensuring inclusive growth and should have been a core priority in the MTBPS, by prioritising the establishment of Special Economic Zones (SEZs) in every township.
On support for small business, there was no commitment to focus the bulk of public procurement spending on SMMEs, which is a total of R1.5 trillion over the next three years.
On spending, the Minister failed to free up funds spent on politicians by abolishing costly Deputy Ministerial roles, along with their associated staffing and perks, which would save R500 million annually. Moreover, he failed to cut VIP protection for politicians—an unnecessary expense for public servants — which would free up approximately R2 billion. Moreover, it is unfortunate that spending on administrative and bureaucratic functions has increased. We reject this.
On energy, we welcome the pronouncement on reforms to attract greater private sector participation. This was mirrored with rail, which is also welcomed. Both are overdue and urgent, and we will monitor at close range to ensure these reforms actually materialise.
In the end, today’s MTBPS lacks the boldness to reshape South Africa’s economic trajectory or deliver real relief to citizens. South Africa deserves a forward-looking budget that prioritizes meaningful economic recovery, creates jobs, and cuts waste.
BOSA will continue to advocate for these necessary changes to build a South Africa where every citizen can thrive.
Issued by Roger Solomons, BOSA Acting Spokesperson, 30 October 2024
