Mboweni expected to paint bleak picture of SA's finances in MTBPS
There are huge expectations of Finance Minister Tito Mboweni to deliver a credible plan to kickstart the economy, but he’s unlikely to try and spin the depressing numbers.
CAPE TOWN - Finance Minister Tito Mboweni is expected to paint a bleak picture of the country’s finances and economic outlook when he delivers his Medium-Term Budget Policy Statement (MTBPS) at this hour.
He’ll be taking to the podium in Parliament against a backdrop of the highest unemployment rate in a decade, a limping economy, lower-than-expected tax revenue and burgeoning government debt.
Looming large will be debt-ridden Eskom and other state-owned entities needing bailouts the country can ill afford.
There are huge expectations of Tito Mboweni to deliver a credible plan to kickstart the economy, but he’s unlikely to try and spin the depressing numbers.
Nor is he likely to play down the enormous risk that Eskom poses to the fiscus and the economy as a whole.
With the release on Tuesday of the government’s roadmap to unbundle Eskom and get it on a sustainable path, Mboweni is also expected to detail how the government will deal with its debt of almost R450 billion. But a long line of struggling SOEs also have their hands out.
The government is not collecting enough money to cover its spending and its borrowing costs are spiraling. So too is the government’s wage bill – taking money that could be spent on improving service delivery and people’s lives.
Meanwhile, Equal Education says it is likely that there will be further cuts to education spending.
The advocacy group says it has previously raised concerns about an almost stagnating Basic Education budget and the implication this would have on millions of pupils across the country.
It says while it recognises that government has had to make tough decisions due to weak economic growth, it is a hard reality that dysfunctional state-owned entities continue to ravage desperately needed state funds.
Equal Education's Rone McFarlane: "We are concerned that money that could go to social priorities such as education and could ensure that learners' rights education is realised is siphoned off in various ways, whether that is through bailouts to SOEs or mismanagement of funds or irregular expenditure or even inefficient expenditure."
The minister will deliver the statement in the National Assembly at 2pm.
Additional reporting by Thando Kubheka.