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The government’s R39bn relief package for individuals and businesses following the negative economic effects of level 4 lockdown and the looting in KwaZulu-Natal and Gauteng unequivocally demonstrates two crucial aspects about SA’s fiscal management that must be properly understood, especially by those who continue to call for more welfare spending such as a universal basic income grant (BIG) and higher public sector wages.

The first observation is that only R2.7bn out of the R39bn relief package could be reprioritised within the existing budget, which demonstrates that there is no room to manoeuvre within the existing budget framework to add more unplanned expenditure. The Treasury has been reprioritising already reprioritised funds, and cannot reprioritise more without further eroding the level and quality of service delivery or completely ending some government programmes.  ..

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