GOOD Statement by Brett Herron,
GOOD Secretary-General & Member of Parliament
25 October 2022
The 2022 Medium-term Budget Policy Statement comes at a time of extreme socio-economic challenges in South Africa and the world.
A time of global inflation, energy crisis and low growth projections, with obscene levels of unemployment, poverty and inequality at home.
In such a climate, there are limited options for our Minister of Finance Enoch Godongwana, who delivers his MTBPS tomorrow. He doesn’t have much to spend, and the situation is unlikely to improve over the next year.
The only wriggle-room available is to spend what we do have better, and to use projected revenue overruns to serve our most pressing strategic fiscal challenges.
Budgeting is about priorities. GOOD’s priority is to ensure that the most vulnerable members of our society have their basic social needs met, and their constitutional rights realised.
The trajectory South Africa is on is unsustainable and elevates the risk of further social unrest.
The extension of the SRD grants towards a more permanent basic income grant is a necessity in a country with such extreme levels of poverty and unemployment. This is an unavoidable moral and constitutional obligation.
At the same time, GOOD understands that it is crucial to reduce the debt burden, as debt-servicing costs continue to crowd out social spending.
The challenge for the Minister today is to recognise the strategic preeminence of the basic income grant, and to rationalise the rest of the budget in a way that accommodates that undeniable moral imperative so as still to achieve a primary budget surplus by 2024/2025.
This requires some skillful fiscal maneuvering, but GOOD has conducted significant research that reveals it is indeed possible.
More money needs to go into the hands of vulnerable people, and less to politicians and failing institutions. Through a firm commitment to zero-based budgeting, Government must eradicate inefficient spending that doesn’t return value for money.
GOOD has sympathy with the Minister on the Eskom dilemma. After decades of corruption and misgovernance, Eskom faces an almighty debt burden that is one of the greatest risks to the national fiscus. At the same time, it is too big to fall in the short-term. Without another entity available to keep the lights on Eskom must be supported until new projects come online.
Any further support to Eskom must be forward looking. Leveraging international climate finance granted to South Africa, it must pursue a path to a cleaner, more sustainable energy mix that will secure reliable energy supply for future generations. It must address long-term systematic challenges, rather than plastering up current failures.
South Africans need to understand how government is spending their tax revenue to actually stop the electricity failures, decommission coal-generation plants scheduled for retirement, and giving effect to a real just transition.
In the context of a global inflation hike, GOOD supports calls to extend the list of zero-VAT essentials for life, mainly food items, to reduce the pressure on families.
What is needed is some breadth of imagination, some foresight, – not business as usual, continuing the drift to the fiscal cliffs.
The country is not without options. It’s in the ordering and prioritising of those options that the morality of a government is truly revealed. GOOD is on the side of the poor, the planet and our future. The budget must do the same.
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