Finance Minister Enoch Godongwana, during his Medium-Term Budget Policy Statement (MTBPS) on Wednesday, announced some SOE bailouts and the extension of the R350 Social Relief of Distress grant as numbers signal improved debt and a better outlook for 2023. Godongwana said that over the next three years, South Africa’s economy is expected to grow at an average of 1.6%.

Minister of Higher Education, Science and Technology Blade Nzimande’s department will not have its budget cut in the coming financial year. He  expressed happiness about this.

Minister of Higher Education, Science and Technology Blade Nzimande. (Photo: Leila Dougan)

“The first thing we welcome is that there won’t be any budget cuts in both departments [higher education, and science and technology] and of course other departments as well. I welcome that, because at least it gives us certainty, hopefully, over the next three years that we are certain about the amount of money.”  

He said that severe budget cuts in the past had led to the department not receiving sufficient money for its needs. Nzimande is preparing a report on sustainable student funding and wants to increase the number of colleges — especially Technical Vocational Education and Training (TVET) colleges. 

Minister in the Presidency Mondli Gungubele believes that a good mini-budget was presented.

Minister in the Presidency Mondli Gungubele. (Photo: Leila Dougan)

“It is well balanced,” he said. “It speaks to micro stability, which is critical for a productive environment and the investors. It also speaks to crime issues, safety… infrastructure that is going to be reinforced to go beyond R100-billion.”

Speaking about the bailouts, especially for Eskom, Gungubele said South Africa cannot do away with the power utility, despite its challenges. 

“Eskom is central to the energy supply in South Africa until other institutions are in place. The only thing we can do is to keep Eskom alive, and improve the situation at Eskom, because if you don’t, where are people going to get energy?”

DA MP Dion George said they had expected the minister to announce policy interventions that would have resulted in economic growth and desperately needed jobs, to alleviate the plight of the most vulnerable South Africans. 

DA spokesperson on finance Dion George. (Photo: Gallo Images / OJ Koloti)

“To do this, he needed to signal a policy direction that would enable the private sector, in particular SMMEs, to do business more easily in our economy. Instead, he reinforced the proven failed developmental state model that places a dysfunctional state at the centre of our economy through more bailouts to SOEs and accelerated government expenditure.”  

George said the bailouts diminish spending in the economy that would have assisted growth and job creation.

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“The greatest failing of this policy statement is its silence on how the government will address the plight of the vulnerable as they battle to survive the relentlessly upward spiralling cost of living. The minister is silent on how the most vulnerable South Africans will be supported, other than the extension of the Social Relief of Distress [grant], which the DA does support.”

National Freedom Party parliamentary leader Ahmed Munzoor Shaik Emam welcomed the MTBPS. 

“[Godongwana] is talking about reduction in debt, which I think we must welcome. Whether or not he will implement it, I do not know. On the issue of Eskom, the government has no other choice but to bail out Eskom. Remember, Eskom can bring the whole country down with the R400- billion debt.” 

Ahmed Munzoor Shaik Emam of the National Freedom Party. (Photo: Leila Dougan)

He said that damage in KwaZulu-Natal was not only caused by the floods in April, but also ailing infrastructure that had been ignored for years.

Good party MP Brett Herron said the MTBPS made many commitments without giving specific amounts.

“Overall, we welcome the extension of the Social Relief of Distress grant; we should use it as a basis to develop a basic income grant. The state has to take some of the debt at Eskom in order to enable Eskom to perform its function, but we agree with the minister that these bailouts need to come with conditions and part of those conditions must be that we start to transition towards renewable energy.”

Good party MP Brett Herron. (Photo: Leila Dougan)

IFP Deputy President Inkosi Mzamo Buthelezi expressed disappointment over the bailouts and said it was time to consider privatising state-owned enterprises.

“I thought the minister would be bold and point to the direction of privatising state-owned entities, because their challenges are non-financial. People are not doing what they were supposed to do, they are embezzling money. Privatisation does not mean the selling of the whole entities, but a portion to private businesses.” 

Inkosi Mzamo Buthelezi of the IFP. (Photo: Supplied)

The civil action organisation Outa celebrated the ‘fall’ of e-tolls after Godongwana announced that the government was doing away with them and that motorists would not have to pay them. The Gauteng provincial government will have to maintain the previously tolled roads and the national government will pay the South African National Roads Agency’s (Sanral’s) debt.

“This is a clear indication to Outa that the e-tolling of the Gauteng freeways will be halted, and the funding mechanism has been shifted to National Treasury and Gauteng provincial government allocations, a solution that Outa proposed to the government over a decade ago,” said Outa CEO Wayne Duvenage.

Outa’s lawyers are representing motorists in 2,028 cases in which Sanral has issued summonses for a total of R265,059,636.15 in unpaid e-tolls bills. In each of these cases, Outa’s lawyers filed a notice of intention to defend, which prevented Sanral from obtaining default judgments against the motorists. DM