Minister Mboweni’s Medium-Term Budget Speech fails to get tough on government waste
28 October 2020
Minister Tito Mboweni’s medium-term budget speech has once again failed to provide the fiscal leadership needed in our country, falling far short of making the tough decisions necessary to cut government’s wasteful expenditure and reduce debt.
The Minister’s focus on preventing the country entering a debt trap, peaking at 95% by 2025, was well received. However, by his own admission, these plans are based upon President’s Ramaphosa’s economic recovery plan generating more employment and more taxes.
Despite the Minister describing the President’s job creation initiatives as ‘game-changing’, the truth is that the 2.2 million real jobs lost in 2020 so far, are to be replaced by temporary work opportunities. These EPWP-type, minimum wage opportunities are not real jobs, do not generate real taxes, and are unlikely to result in increased government revenue to reduce South Africa’s debt ratios.
Mboweni made no mention of the stalled talks with the IMF to borrow $1 billion, arising from the IMF’s insistence that such funding could not be used to fund ailing State-Owned Entities. Mboweni remained silent on what conditions are being placed on foreign borrowings and what, if anything, our government is doing to meet these requirements.