Opposition political parties yesterday criticised Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) as a mixed bag, saying it had provided more bailouts but failed to give precise details on the plans to fix ailing state-owned enterprises (SOEs).
Godongwana said government would take over a significant portion of Eskom’s R400 billion debt to ensure Eskom’s long-term financial viability, however, no further details on the plan were discussed.
“The debt takeover, once finalised, together with other reforms will ensure that Eskom is financially sustainable,” said Godongwana.
He also announced that the R350 social relief of distress (SRD) grants would be extended until March 2024.
Tabling his adjustment appropriation bill, Godongwana also said R13bn in spending adjustments were made.
These included the R389m for Welizizwe Rural bridges, R500m to start the Home Affairs digitisation project and R118m to deal with relocation costs and preparations for the rebuilding of Parliament.
With regards to Gauteng’s e-tolls and its debt burden to Sanral, Godongwana said the Gauteng provincial government had agreed to contribute 30% to settling Sanral’s debt and interest obligations, while national government covers 70%.
Transnet has been allocated R2.9bn to ensure the return of out-of-service locomotives, while Denel has been allocated R3.4bn to support recent progress made to stabilise the entity.
EFF deputy president Floyd Shivambu said yesterday’s budget did not address the country’s erratic electricity supply.
“The medium-term budget speech does not say anything coherent and believable about a dependable electricity supply.”
Shivambu said although the government had agreed to bail out Eskom, there was no detail on how the power supply would be stabilised.
“State debt is more than R4.7 trillion and government will be expending an average R355.3bn per year paying debt services over the medium-term expenditure framework.”
The IFP’s deputy president Mzamo Buthelezi said they were disappointed as Godongwana had made many promises regarding Eskom and they were not confident that these would result in a turnaround of the SOE.
“We have heard these promises in the past. The IFP is on record to say that the state-owned entities must be open to privatisation. There is nothing that government can do because the problems with SOEs have little to do with finance but more to do with leadership that has been put there.”
Buthelezi said the weaknesses of the state were the key issue.
“We do not support bailouts and we were hoping the minister would say something else.”
The DA said the MTBPS fell short of expectations, specifically on things like driving growth and generating jobs in the economy.
“We were looking for some sort of incentive for business to be able to operate more effectively. Also, Treasury said it would reduce debt over the next two years and they are doing the opposite,” the party said.
Freedom Front Plus leader Pieter Groenewald said the only solution to the issues at SOEs was privatisation.
“The government must come to a point where it privatises all SOEs. In this budget an additional R35bn has been given to some SOEs like Denel and Transnet, but we don’t know what is the final word on Eskom. Eskom debt is R400bn and if they take off half then what about the interest on the remaining debt? If the government wants to address Eskom, they must change legislation so that they ring-fence all municipal income so that money paid by consumers for water or electricity is paid directly to Eskom.”
ActionSA leader Herman Mashaba said rather than taking responsibility for the tragic condition of the economy on behalf of the ANC, Godongwana evaded accountability at all costs.
“We agree with Minister Godongwana that unreliable electricity supply, costly and inefficient ports and rail network, crime and corruption, weak state capacity and barriers to entry for small businesses are holding South Africa back.
“Today’s speech will do little to provide hope that our government is capable of addressing South Africa’s significant challenges with energy, logistics, water supply and attracting investment.
“The proposed measures to address our energy crisis are particularly concerning, as it again shows that the government is simply not treating the crisis with the urgency it requires,” Mashaba said in a statement.
However, he said the party welcomes the government’s attempts to address South Africa’s fiscal instability and the plan to reduce the national debt. | Additional Reporting Mayibongwe Maqhina