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Budget cuts- is it the way to go Minister?

ARE WE facing Budget cuts or…?

That’s the question on all and sundry as the minister of Finance Enoch Godongwana tables the much awaited Budget Speech today in Cape Town.

Various departments says its part of austerity measures but Treasury has denied this.

SMMEs who are regarded as key creators of jobs are dwindling in debts or are not receiving enough financial aid to sustain themselves, with the portfolio department being taken to task for not doing enough to remedy the situation that amongst others, was exacerbated by the unrest and looting in 2021.

Due to the pandemic outbreak in 2020, a supplementary budget indicated R2.1bn had been cut from department of basic education; further R1.5 billion in cuts across provincial education departments and that former finance minister Tito Mboweni (now in the private sector) reported a staggering cut of R264bn over the next three-years. Very disturbing.

Now in his Budget Speech, Godongwana has to make amends and deal with Treasury on the availability of fiscus since the R350 grants has been extended until March in 2023, amongst others.

Union federations including Saftu and Cosatu are concerned about the impact of more budgets cuts by the finance minister, on social spending and other programmes affecting labour.

Several organisations, including the EFF, have planned protests outside Parliament on Wednesday against budget cuts and the government’s IMF loan.

The police budget has also been victim to cuts of over R20 billion over three years.

The health department also took a huge knock, and minister Dr Joe Phaahla said: “The health services have taken a huge knock in terms of the pressure, so I would be happy if also there is some attempt to preserve the capacity and allocate reasonable funds for us to keep the capacity because we’re not only a department of COVID.”

Last year, Treasury also detailed its plans to radically reduce spending on the government wage bill, which accounts for 32% of government expenditure over the medium term.

We expect the following to increase: sins tax, fuel and the controversial e-tolls.

Eskom and other SOEs should also feature on how they will be aided with funds.

Youth unemployment has risen to 64% and nationally to 35%, and the question is will programmes to create job opportunities be conducive and sustainable- how, when and at what cost?

How the minister mitigates all this- we shall wait.

Image (Facing daunting task. Finance Minister Enoch Godongwana).

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