Finance Minister Tito Mboweni has yet another grim task facing him on Wednesday. During his two-year stint with the Treasury, the 61-year-old has had to fight with multiple recessions, the aftershocks of state capture, and the devastation wreaked by the coronavirus pandemic. His mid-term Budget Speech has the potential to be brutal.
Tito Mboweni’s balancing act
Funds are likely to be slashed, certain taxes are facing an increase, and economic projections are likely to ensure that anyone tuning into these proceedings will have to watch most of the broadcast from behind the sofa.
However, despite the difficult decisions which lie ahead, there may also be some small slices of optimism we can cling to. As Tito Mboweni brings forth his Aloe Ferox for yet another occassion, we’ve got a brief summary of what’s on the cards.
The mid-term Budget Speech preview: Assessing the good, the bad, and the ugly
- The money has got to come from somewhere, and numerous govt budgets could be slashed – including funds for housing.
- State companies such as Denel and SAA are likely to receive further bailouts, draining the already-bare resources.
- A dispute with public sector workers looms. Unions still have a lucrative wage agreement in place, but Mboweni could look to reduce payments here. A failure to slash these salaries may cost SA upwards of R40 billion.
- There are tax increases on the horizon. It’s expected that tobacco and fuel levies will be targeted on Wednesday.
- Rather than just increases, it’s believed that ‘new taxation methods’ – such as a wealth tax – are also being plotted.
- Growth forecasts are set to reveal the true horror of COVID’s impact, with the economy likely to contract by just under 10% at the end of this year. Mboweni will reveal all later on Wednesday afternoon