Business Day Spotlight
PODCAST | Economic news of the week: Will the budget be enough to save Eskom?
Eskom must be saved. There is no other option.
With the national budget speech for the year firmly in the rear-view mirror, we look back at the tax and energy issues raised by finance minister Tito Mboweni in this edition of the Business Day Spotlight.
Our host Mudiwa Gavaza is joined by Neil Cornelius, MD of the global consulting firm Berkeley Research Group; and Reabetswe Moloi, an attorney from Tax Consulting SA.
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The National Treasury released its income and expenditure plans for the year on Wednesday, 26 February 2020.
Moloi starts off the show by giving a wrap of the tax matters raised in the budget, such as the non-increase in major taxes and selective excise duties. She says the minister probably made the best decision to not increase personal taxes given how pressured South Africans are already.
Cornelius, who joins us on the line from London, summarises the energy-related parts of the budget, highlighting the uphill funding battle that the government faces in trying to clear Eskom’s debts, while ensuring the power utility’s sustainability for the future.
Much of the discussion centres around the role of taxpayer money being use to bail out ailing state-owned enterprises (SOEs).
Given the economic pressure on consumers, Moloi says taxpayers have become acutely aware of how the government is spending its money. Slow action or no progress with implementation of government policy, particularly around energy, makes it harder to justify any increases in taxes or levies from the populous, she says.
Despite this negative sentiment towards government spending, Cornelius says Eskom needs to be fixed. It has to happen. He says the situation has become so dire at the SOE that the government may be forced to actually implement its plans this time around. Compared to years of inaction, there’s no choice but to act now to ensure power for the country, he says.
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