Godongwana under pressure to address fuel costs, public spending

Finance Minister Enoch Godongwana faces mounting pressure as he tables the Medium Term Budget Policy Statement (MTBPS) today amid expectations to rein in spending and come up with interventions to address the rising costs of fuel.

Godongwana is expected to outline government spending plans, revenue expectations, and management of public finances for the next three years.

Labour federation Cosatu said workers are under siege with youth unemployment standing at 48% and 1.2% economic growth.

Parliamentary coordinator Matthew Parks said today's MTBPS cannot be business as usual.

“The government must signal a bold shift to stimulate growth, rebuild public and municipal services, provide relief to workers and the poor, and give hope to the nation. It is time to end tried and failed neo-liberal austerity policies that have crippled growth. We must now invest to grow the economy and tackle unemployment,” Parks said.

DA prioritises debt reduction and accountability

DA spokesperson on finance, Kingsley Wakelin, said today’s MTBPS will show whether the government was still serious about fixing the public finances.

Wakelin said there must be better spending, faster reform and greater accountability.

He said the government must stabilise debt, spend on the right things and speed up reform.

“The government must keep its commitments to stabilise debt and grow the primary surplus. This year South Africa will spend R432.4 billion servicing its debt. That is money that could have gone to schools, clinics, police and roads,” he said.

Wakelin also said the tax collections were expected to come in well above February’s estimates. 

“That money should not be locked into new permanent spending. Paying down debt and supporting growth must come first.”

Parties seek fuel-price relief and action on illicit trade

ActionSA MP Alan Beesley said his party expected Godongwana to come up with immediate relief for South Africans grappling with rising fuel prices and the cost of living.

“The government must surely act in recognition that fuel prices translate into higher prices for food, basic goods, services and virtually every part of the economy that depends on transportation. With SARS continuing to record strong revenue collections above targets, in a large part due to being further capacitated, the government has a compelling opportunity to provide meaningful fuel levy relief without compromising its fiscal objectives,” Beesely said.

He also called on Godongwana to deal with the illicit economy.

“The minister must announce a three-year moratorium on above-inflation increases in excise duties on these products to provide legitimate businesses with greater certainty, protect jobs and help curb the growth of the dangerous illicit market,” Beesley said.

He also said cracking down on the illicit economy would broaden the tax base by bringing economic activity into the formal sector and recovering revenue currently lost to the fiscus. 

“By combining fuel levy relief with decisive action against illicit trade, the government can ease the cost-of-living crisis, strengthen revenue collection and support economic growth.

“ActionSA’s support for the adjustment budget will depend entirely on whether the Government of National Unity is prepared to deliver urgent relief to struggling South Africans and take action against the illicit economy. We cannot support a budget that asks South Africans to bear more of the burden while the government fails to address the underlying problems holding our economy back,” said Beesely.

Build One South Africa MP Nobuntu Hlazo-Webster said Godongwana should strip from the VIP budget 20% and redirect it towards frontline policing.

“The MTBPS is an opportunity to strengthen parliamentary power to block wasteful expenditure before it happens,” Hlazo-Webster said.