Minister of Finance Enoch Godongwana’s maiden medium-term budget has been cautiously welcomed by economists and analysts, but slammed by trade union federation Cosatu as “tepid”.
Godongwana did not deviate much from his predecessor Tito Mboweni, warning of the catastrophe that will result if SA’s doesn’t manage in rein in ballooning debt service payments and the need to cut wages, while promising that the state will continue to play its role as a provider of social services.
Like Mboweni, Godongwana said higher economic growth is needed to fund the state’s coffers, but was vague about what can be done.
He was able to announce better-than-expected tax revenues (R120 billion higher than projected in February) and an improved economic outlook.
South Africans will have to wait until February to learn what Godongwana’s tax plans are.
Commenting on Godongwana’s “tough love” comments on SOEs, Minister of Communications & Digital Technologies, Khumbudzo Ntshavheni, said that while going tough on SOEs is part of the reform process, she is “not happy” because the South African Post Office is affected.
“SAPO needs money to be restructured,” said Ntshavheni.
Ntshavheni said she is hopeful that between now and the main budget in February that there would be “engagements” with Cabinet and National Treasury to get consensus on the funding of the SOE.
“We have put through a strategy, we are taking to cabinet … on how we propose too turnaround SAPO.