Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement exposes the ruling party’s dearth of strategies for economic growth and job creation. Coupled with reckless expenditure, this has plunged South Africa into a dire financial predicament, disproportionately affecting the most vulnerable amidst an escalating cost-of-living crisis.
It’s been four years since former Finance Minister Tito Mboweni delivered the ‘Aloe Vera’ Budget Speech in 2019, cautioning that unchecked public spending would lead to a fiscal cliff. Godongwana’s recent mini-budget demonstrated that unproductive and irresponsible spending by the ruling party has ballooned while mismanaging the economy.
Rather than presenting fresh, innovative solutions for the cost-of-living challenges faced by millions of South Africans, Minister Godongwana’s budget will exacerbate the pain. It proposes severe spending cuts, planned tax increases of R15 billion, and below-inflation adjustments for crucial services like healthcare, policing, and education.
Meanwhile, the minister neglected to address the primary obstacle to economic growth: mismanagement of public funds and the pillaging of public coffers. South Africa doesn’t suffer from a lack of funds but from insufficient returns on its current expenditures.
The repeated promise of accelerating economic reforms and enhancing private sector involvement has failed to yield results, as pledged by President Ramaphosa since his 2018 election – five years on, with no tangible outcomes.
ActionSA stresses that the country’s strenuous financial situation stems from the damaging legacy of the president and the ruling party. Ramaphosa and the ruling party shouldn’t offload the burden onto the already overburdened South African populace, as they are attempting to do in light of the deepening cost-of-living crisis.
Aligned with policies from our September policy conference, ActionSA believes in stabilizing the economy by promoting competition in electricity generation and transportation, escalating infrastructure investment, and rectifying law enforcement breakdowns by lengthening prison sentences and deploying more police officers. These actions aim to boost the middle class, widen the tax base, and improve fiscal stability.
While ActionSA welcomes the surge in infrastructure spending, the lack of similar backing for frontline services like healthcare, policing, and education is troubling. The planned over R120 billion cuts to housing and essential services over the next three years will directly impact the underprivileged and marginalized in our communities.
ActionSA advocates for all departments to conduct reorganization, redirecting funds toward frontline service delivery, including doctors, teachers, and law enforcement personnel. Streamlining and merging duplicated departments to under 20, as proposed at ActionSA’s policy conference, aims to reduce inefficiencies and save funds. It’s disconcerting that the National Treasury plans to establish another infrastructure delivery office when a similar office already exists within the presidency – creating unnecessary duplication.
Substantial change is imperative to mend our economy, curb reckless spending, and broaden the tax base. Clearly, South Africa is headed for trouble under the ruling party, and every South African should register to vote for action in 2024. We cannot allow the ruling party to further burden our people.
By Herman Mashaba, ActionSA President
