THE FINANCE minister Tito Mboweni supplementary budget speech to the nation had some confused yet others took a leaf from it.
Take a look at some of the key points Mboweni focused on during his speech.
- As the wise farmer will tell you, when the tempest is raging you must protect your plants from damage. Our Aloe Ferox, like our people, is protected. Mr President, you are the wise farmer, caring for this Aloe Ferox. The storm is not over.
- Our Herculean task is to close the mouth of the Hippopotamus!
- The gospel according to the Apostle Matthew, chapter 7 verses 13 and 14, springs to mind:
- Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it. We are faced, as a nation with a choice between these two gates.
- Gospel tells us:Small is the gate and narrow the road that leads to life, and only a few find it.
- To quote the President, in his letter to the nation on Monday:Let us put shoulder to the wheel and turn this adversity into opportunity. Let us reimagine and repurpose our economy and put it firmly on a solid and sustainable path.
Budget salient points:
- This Supplementary Budget sets out a roadmap to stabilise debt, by improving our spending patterns, and creating a foundation for economic revival.
- Spending has to stop. Inflation takes hold and people grow much poorer. This is what happened to Germany in the 1920s, to Argentina and to Zimbabwe in the early 2000s, and to Greece in the past few years. Argentina had its ships attached. Greek civil servants and pensioners had their salaries and pensions slashed. In short it is doom and despair. We have been there before: in its closing days, the Apartheid government had to declare a debt standstill.
- This year, out of every rand that we pay in tax, 21 cents goes to paying the interest on our past debts.
- The South African economy is now expected to contract by 7.2 percent in 2020. This is the largest contraction in nearly 90 years.
- Projected total consolidated budget spending, including debt service costs, will exceed R2 trillion for the first time ever
- Our early projection is that gross national debt will be close to R4 trillion, or 81.8 percent, of GDP by the end of this fiscal year. This is compared to an estimate of R3.56 trillion, or 65.6 percent, of GDP projected in February.
- Government intends to borrow about $7bn from international finance institutions to support the pandemic response.
- Government will narrow the deficit and stabilise debt at 87.4 percent of GDP in 2023/24. Cabinet has also adopted a target of a primary surplus by 2023/24.
- We need to find spending adjustments of about R230 billion over the next two years.
- Tax measures of R40bnover the next four years will also be required.
- Government will also be allocating R3bnto recapitalise the Land Bank.
- This year nearly half of all consolidated revenue will go towards the compensation of workers in the public.
- R21.5bn for Covid-19-related health care spending.
- To support vulnerable households an additional allocation of R25.5bn to the Social Development department is proposed, for a total relief package of R41bn.All these measures will come to an end in October
- The Economic Support Package sets aside R100bn for a multi-year, comprehensive response to our jobs emergency. In this year, an amount of R6.1bn is already allocated, and a further R19.6bn has been set aside mainly for this purpose.- division of revenue: the national share for 2020/21 increases from R758bn to R790bn, the provincial share decreases from R649bn to R645bn and the local government share increases from R133bn to R140bn.
Image (Chris Hani Baragwanath Hospital to receive substantial funding as part of Covid-19 health care spending).