Finance minister Tito Mboweni. Pictures: GCIS/KOPANO TLAPE
Finance minister Tito Mboweni. Pictures: GCIS/KOPANO TLAPE

The method of zero-based budgeting which the Treasury has committed itself to will allow the government to prioritise its spending in a better way, including towards growth-enhancing programmes, finance minister Tito Mboweni said on Wednesday.

Zero-based budgeting starts off from a fresh slate and does not use the previous year’s budget as a baseline from which to start.

Mboweni believes this approach will assist the government as it implements the R230bn in budget cuts planned for the next two years, though critics of the Treasury’s plans, such as credit ratings agencies, are sceptical about the government’s ability to cut expenditure to this extent. They also do not believe that zero-based budgeting will be the panacea it is presented to be.

Mboweni said in his closing remarks on the debate in the National Assembly on the Division of Revenue Amendment Bill that zero-based budgeting would allow the government to prioritise those items that were “unavoidable, are growth enhancing and will assist in propelling the economy going forward while continuing to support our people”.

He accepted the recommendation by IFP MP Mkhuleko Hlengwa that Treasury should conduct impact assessments to prevent the abuse of public funds. Mboweni said this would ensure that funds reached the purpose for which they were budgeted and that the “thieves and wolves at the door are kept away and that the people benefit from whatever little that we have”.

He criticised Freedom Front Plus MP Wouter Wessels for threatening a tax revolt in the National Assembly. Wessels said that taxpayers were questioning whether they should pay taxes when there was mismanagement and corruption in government and an absence of service delivery.

The bill was adopted with 214 MPs voting in favour and 119 against. The main opposition parties such as the DA, EFF, Freedom Front Plus and the African Christian Democratic Party voted against the bill.

DA finance spokesperson Geordin Hill-Lewis noted in his speech the severe cuts that the bill imposed on provinces, particularly in health and education, and highlighted the collapse of hospital services in the Eastern Cape as a result of “years of corruption, mismanagement and cadre deployment”.

Hill-Lewis said the bill cut R2.2bn from provincial governments’ infrastructure grants for building schools, roads and clinics and they had to find R16bn in reprioritisations.

“The message in this budget is that provincial governments are on their own in the fight against Covid-19,” Hill-Lewis said.

He called on Mboweni “to draw a line in the sand” and refuse to provide funds for SAA to implement its business rescue plan.

“We are putting the minister on notice that any attempt to use ‘emergency’ powers under section 16 of the Public Finance Management Act will likely be illegal, and we will take action to stop that.”

Other opposition MPs dealt with the lack of funding for municipalities, which are at the forefront of service delivery, the lack of consequences for those involved in looting the state and ANC mismanagement in provinces and municipalities.

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