INSIDE POLITICS TEAM|
THE Democratic Alliance says the Minister of Finance Enoch Godongwana’s budget speech offered a welcome but cautious narrative on the state of South Africa’s fiscal trajectory.
The party, however, said it was concerned that the finance minister did not go far enough to address the elephant in the room, the public sector wage bill, escalating costs of our national debt and precise detail on the State-Owned Enterprises (SOEs).
“Although we welcome the reduction in the corporate income tax, which the market had already factored in, GDP growth is still very low to support job creation and reduce unemployment,” said the party’s shadow minister of finance, Dion George, shortly after Godongwana delivered his maiden budget Budget Speech in Parliament.
“Projected average GDP growth of 1,8% over the next three years will not be enough to address South Africa’s high unemployment rate which reached 34,9% in the third quarter of 2021.”
George said while the DA supports temporary public employment initiatives to provide relief to the unemployed, they are not a sustainable approach to create permanent jobs in the economy.
He added that while the finance minister made a commitment, over the medium term, to devote attention towards cutting red tape for small businesses, he has failed to provide specific details of how this will be achieved.
“The DA’s alternative budget made it clear that onerous BBBEE requirements were hampering competitiveness and limiting the SMME’s sector to create jobs. The Minister missed an opportunity to accelerate job creation in this sector by not including specific tax relief on startups in particular,” said George.
The DA further said it welcomed the extension of the Social Relief Distress Grant for another 12 months, saying vulnerable South Africans should not be made to shoulder the burden of government policy failure.
“We believe that effective growth enabling incentives can increase growth and revenue and the introduction of a conditional basic income grant.”
He said the failure by the government to provide a clear path for private sector involvement in the SOE sector continues to pose a financial risk to the fiscus.
“In this budget, it was made clear that the fiscal balance sheet continues to be exposed to significant financial guarantees and direct cash support to SOEs such as Denel, SAA and the Land Bank. As indicated in our Alternative Budget, the government should instead be readying SOEs for private sector investment to increase their competitiveness and profitability,” said George.
“We hope that the new Minister will impose strong conditions on existing bailouts to SOEs and depart from the soft conditions imposed by his predecessors.”
– Inside Politics
