GOOD Statement by Brett Herron,
GOOD Secretary-General & Member of Parliament
22 February 2023
South Africa’s budget needs fundamental reconfiguration.
The Minister of Finance seems trapped in a pattern of adding a little extra to last year’s line items, which added a little extra to the previous year’s… This pattern of spending has been a key driver of widening inequality for decades.
This year’s budget is reasonably good for the haves in society (no tax hikes, rebates for solar panels), but contains slim pickings for the have-nots (no increase in the lamentable R350 poverty grant, no advance on a Basic Income Grant, and no assistance to escape Eskom malperformance).
Furthermore, despite commitment in the President’s State of the Nation Address that existing social grants will be increased to cushion the poor against rising inflation, the extra crumbs announced for child care and old age pensions today insult our most vulnerable people.
It was good to hear that South Africa’s economy grew by an estimated 2.5% in 2022 (up from the 1.9% projection in the MTBP) though we note that this hasn’t had an impact on real unemployment numbers. The fact that the medium-term growth outlook has deteriorated is more bad news for job-seekers.
We welcome the decision not to implement major tax increases, even if as a consequence of improved tax collections and not as a result of improved economic outlooks.
Spending on Eskom is unpalatable but necessary. Any rational and effective steps towards stabilizing energy supply must be supported, including allocating Eskom massive funds in debt relief. Relieving the pressure on Eskom to service these loans should enable it to invest in necessary maintenance.
The announcement of the new tax incentive for the installations of rooftop solar panels is a wasted opportunity. The Minister announced that from 1 March, individuals who install rooftop solar panels from will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000.
In order to claim the rebate, however, residents will have to lay out approximately R100 000, including the cost of batteries and inverters. It is an expensive exercise that the vast majority of South Africans wont be able to afford.
Far better, if the State wished to reach a wider slice of the population in its rollout of solar energy, would have been to institute a programme linking repayments over 20 years to municipal bills.
The bottom line on this year’s budget: It sought to please all, besides the 18 million people living in poverty.
Media Enquiries:
Brett Herron, GOOD Secretary-General & Member of Parliament
Cell: 0825183264
Email: bretth@forgood.org.za
Janke Tolmay, GOOD Media Manager
Cell: 0733671223
Email: janke@forgood.org.za