ANC supports the MTPBS; the opposition is not that impressed
And the EFF said cosmetic austerity changes regarding ministers’ travel arrangement do not address much-needed structural reforms
The ANC has thrown its support behind finance minister Tito Mboweni’s medium-term budget policy statement (MTBPS), and says it will work to ensure that measures put in place are implemented.
“Key to all the measures introduced in the MTBPS is strengthening the capabilities of the state, so that it fulfils its mandate of services to the people,” ANC spokesperson Pule Mabe said. “This is the responsibility of every single one of more than a million public servants, who must play a leading role in these efforts, as they implement policies and national frameworks.”
Mboweni delivered a medium-term budget with the budget deficit set to be two percentage points higher on average over the next three years than forecast just eight months ago.
The ANC welcomed the interventions announced with regards to Eskom, which include the measures introduced to restructure the entity into three parts and the assurance that strategic components, such as generation and transmission, will always be treated as a national assets, with a majority stake remaining in the public hands.
Mboweni, however, did not announce any new measures to restructure Eskom’s debt, but said he wanted to see reforms before the utility could get more financial support. Eskom, which has debt of R450bn that it is unable to service, has said that it needs to be relieved of R250bn of the debt to be sustainable.
The ANC also noted the measures proposed to ensure that government reduce wasteful expenditure across all spheres, without cutting essential services.
“Leadership must lead on this matter, and we welcome the reduction of fringe benefits to political office bearers, less expensive cars, and cheaper modes of air travel, as well as capping of salary increments to below [the consumer price index],” Mabe said.
The DA acknowledged Mboweni’s “honesty” that things were worse than imagined and welcomed the tough talk on cutting the public wage bill and on the management of state-owned entities (SOEs). “But the minister’s number one priority in this speech was to present a credible plan to control national debt and rein in the deficit. The fact is that he did not do this,” DA finance spokesperson Geordin Hill-Lewis said. “For all the tough talk, the minister’s bark was worse than his bite.”
Hill-Lewis said the spending cuts Mboweni did announce — roughly R50bn over the next two years — would not be nearly enough to slow down the ballooning of national debt, and would not be enough to restore credibility with ratings agencies.
“While the basic services on which the public rely are being cut, more money is being spent on failing SOEs. This is an indefensible choice,” Hill-Lewis said, who warned that “further procrastination will have terrible consequences” for SA, particularly for the poor, as service spending is squeezed out by debt and salaries.
The DA urged Mboweni to implement the proposal to cut the wage bill.
EFF chief whip Floyd Shivambu criticised the lack of any plan to grow the economy to have enough revenue to address the debt burden. No deliverable structural reforms were announced, he said.
“[The minister] spoke about cosmetic austerity changes, such as the travel costs for ministers, cellphones, and so on, but those won’t shift the fiscal framework that is currently in crisis.
“There is nothing fundamentally new that the minister has introduced today. It is just going to be business as usual, it is going to be no growth and it is going to be declining revenue because there no deliverable revenue collection strategy has been announced today.
“We, as the EFF, are not at all inspired by what Tito Mboweni said today,” Shivambu said.
Freedom Front Plus MP Wouter Wessels also said Mboweni had not announced any plans to grow the economy nor any measures to reduce the unsustainable debt level.