GOOD SG says each year’s budget speech and medium term budget policy statement deliver sets of commitments that haven’t changed a thing

MTBPS 2024: Minister needs to show commitment to GNU statement of intent and prioritise economic growth

28 October 2024

The GOOD Party calls on Finance Minister, Enoch Godongwana to prove he is prioritising rapid, inclusive and sustainable economic growth.

On Wednesday, Godongwana will deliver his Medium Term Budget Policy Statement, the first since the Government of National Unity was formed in June.

Although the ‘mini-budget’ is not a policy-setting event we expect to see indications that we are heading to credible fiscal reforms discussed in the GNU statement of intent.

South Africans have suffered the crippling effects of an under-performing economy, which has failed to create jobs or eliminate inequality and poverty.

Each year’s budget speech and medium term budget policy statement deliver sets of commitments that haven’t changed a thing. 

We must revise the budgeting template we roll over each year, eliminate unnecessary and wasteful expenditure, and urgently get money into the hands of those who most need it.

South Africa’s current debt ratio is not excessive. If the country incurs additional debt, for the right kind of spending, then it can borrow its way out of economic stagnation.  

If the choice, in the short term, is between borrowing or cutting social and infrastructure expenditure then we must choose borrowing. 

Cutting spending, to critical services like education, health and social security, will relegate us to languishing in economic hardship and set us back for generations to come. 

We also call on the Minister to consider an amendment to the Provincial Equitable Share formula so that the Education and Health components are transferred to provinces as conditional grants - ringfenced for the purposes the funding was intended for.

The provinces need to be deterred from raiding education budgets and cutting teacher posts.

It will only entrench and deepen poverty and trap our economy in a cycle of low growth and induced underperformance.  

Rapid hikes in the cost of living further constrain consumer spending and economic growth.

The Minister must tell us what the State will do to ensure some cost of living relief for South Africans.

In the absence of an economy that is creating enough jobs to radically reduce unemployment we have no choice but to provide social security to those who have no access to any income.

Those who live without any income and who qualify for the Social Relief of Distress Grant have been living on R370 per month, while the food poverty line has now reached R760 per person per month.

This means that the eight million beneficiaries of the grant are not able to meet their most basic food requirements each month. 

This is a violation of their human rights and is socially and economically unsustainable. 

Section 27 of the Constitution guarantees every South African adequate social security to meet their most basic needs.

The Minister of Finance must cross the Rubicon: The SRD Grant can no longer be regarded as a temporary measure. 

Our economy must prioritise the provision of a Basic Income Grant, which we have calculated should be pegged at a minimum of  R999 per month.  

South Africa is an emerging economy struggling to overcome a number of crises, some not of its own making. 

The Minister must address the economic pressures we can control so that our economy can be released from undermining itself.

It is time for the hard decisions to be made.

Issued by Brett Herron, SG, Good, 28 October 2024