Mboweni and team to appear in Parly

Opposition parties were mostly unimpressed with the mid-term budget review, which includes billions of rands in bailouts for cash-strapped state-owned companies.

Finance Minister Tito Mboweni delivers his Medium-Term Budget Policy Statement on 24 October 2018 in Parliament. Picture: @ParliamentofRSA/Twitter

CAPE TOWN - Finance Minister Tito Mboweni and his team from Treasury will be back in Parliament on Thursday, this time to field questions at a joint meeting of its finance and appropriations committees.

Grim figures released in Wednesday’s Medium-Term Budget Policy Statement triggered a sell-off of the rand and government bonds.

The country's growth prospects have been slashed by half and debt levels are set to rise higher than forecast in the February budget.

“We can spend our money better, Madam Speaker, too much money goes missing. We must restore good governance and fight corruption in all its forms. Money that leaks out of the system is no longer available to support our efforts to reduce poverty and lighten the burden of the poor.”

A clear message from Mboweni but the question is whether the Medium-Term Budget Policy Statement shows, in the numbers, that the government’s commitment to digging the country out of its fiscal hole is more than talk.

Opposition parties were mostly unimpressed with the mid-term budget review, which includes billions of rands in bailouts for cash-strapped state-owned companies, including South African Airways, SA Express and the South African Post Office.

“Our state-owned companies can spend our money better as well. Many of these SOEs need to be reconfigured.”

Mboweni’s also likely to face criticism over the decision to add only three items to the list of goods zero-rated for VAT, which will cost R1.2 billion.

WATCH: Unpacking the MTBPS 2018

UNPAID BILLS

Mounting unpaid bills in municipalities and provincial departments pose a fiscal risk, Treasury has warned.

The Medium-Term Budget Policy Statement shows service delivery could be compromised if provinces and local government have to use money meant for basic service to pay their outstanding bills.

Provinces owe an estimated R25 billion while municipalities owe more than R23 billion, most of it to Eskom and water boards.

Mboweni says Treasury is working with the Department of Cooperative Governance and Traditional Affairs to deal with financial misconduct in all spheres of government.

“We are developing measures to improve transparency and governance processes. Key is the employment of qualified, competent and incorruptible officials.”

Mboweni says 113 municipalities - 30 more than the previous year - adopted unfunded budgets, in other words, allocating money they did not have to spend.

“In many cases, like in the Modimolle-Mookgophong Municipality, the challenges faced by municipalities are a reflection of weaknesses in governance, or even fraud and outright corruption.”

READ: The full MTPBS

Speech by Primedia Broadcasting on Scribd

(Edited by Mihlali Ntsabo)