Debt, more debt and debt relief
By Tshegofatso Makola
The Minister of Finance, Enoch Godongwana played the role of the “king of money”, as debt relief and bailouts were handed to taxpayers and the crisis-ridden power utility, Eskom. This is as Godongwana presented the National Budget on 22 February 2023.
The Minister of Finance of Enoch Godongwana delivered the annual National Budget Speech in the City Hall in Cape Town today. This follows weeks of panic and uncertainty about the state of our economy and how debt would be managed going forward.
A few highlights from the address include:
- the 4.9% increase in sin tax
- fuel levy and Road Accident Fund will not be increased
- the R13 billion tax relief
- individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25 percent of the cost of the panels, up to a maximum of R15 000
- a total debt-relief arrangement for Eskom of R 254 billion
With many new adjustments made, the Minister shone a light on the failure of State-owned Enterprises, in his announcement of their bailouts once again.
Eskom, South African Airways, and the South African Post Office we’re each granted bailouts, a scene that citizens have become accustomed to.
Speaking on the issues of public sector wages, Godongwana expressed that the Budget provides for the carry-through costs of the 2022/23 wage increase, adding that the outcomes of the recent wage negotiations that have begun are not preempted by the Budget.
This is as unions have called for a double-digit wage increase as well as held a picket ahead of the Budget Speech, to deliver their strike notices to the government.
“An unbudgeted wage settlement will require very significant trade-offs in government spending because the wage bill is a significant cost driver.
It will mean that funds must be clawed back in other ways.”- Minister of Finance: Enoch Godongwana
Such a response to the wage issue could see unions protest next month.