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Opposition parties reject Mboweni’s ‘uninspired’ supplementary budget

The emergency budget is aimed at addressing the devastated local economy that is buckling under the pressure of the COVID-19 pandemic.

Finance Minister Tito Mboweni: Image: Twitter/SAgovnews

JOHANNESBURG – Opposition parties on Wednesday rejected Finance Minister Tito Mboweni’s supplementary budget which is aimed at addressing the devastated economy that is buckling under the pressure of the COVID-19 pandemic.

The Democratic Alliance (DA) called the budget uninspired and said it lacked detail on how government planned to fix the country’s social issues.

The Inkatha Freedom Party (IFP) said that Mboweni had failed to explain how government aimed to address the issue of failing state-owned enterprises (SOEs).

FULL TEXT: Mboweni’s Supplementary Budget Speech

The DA MP and spokesperson on finance, Geordin Hill-Lewis, said that government’s plans to borrow billions of rand from international institutions did not inspire confidence.

“In short, if the government does not implement far-ranging economic reform now, the economic crisis will be far worse than previously thought. But this government has made no progress on fundamental reform to date,” Lewis said in a statement.

“All available evidence suggests the ‘passive path’ is the more likely path the ANC will follow. If the minister wanted to convince otherwise, he needed to lay out much more detail on how fiscal discipline will be achieved, debt brought under control, and economic growth spurred,” he added.

The IFP MP and spokesperson on finance and public enterprises, Inkosi Mzamo Buthelezi, said that National Treasury needed to explain if failing SOEs would continue to be funded by government.

“The IFP believes that there is no other alternative but to phase out the control of the state, in terms of partially privatising SOEs and implement stricter measures in which we are to appoint the best of what we have to offer in skills, expertise, and knowledge in running effective, efficient, and profit-making SOEs,” Buthelezi said in a statement.

“We do not need more plans, we need implementation and we need the executive to walk its talk on getting things done and correcting the basics whilst simultaneously addressing our social issues and improving the lives and livelihoods of all South Africans,” he added.

Opposition parties agreed with Mboweni that the country should work together to recover the economy post-COVID-19.

At the same time, the Economic Freedom Fighters (EFF) accused Mboweni of prioritising big business over poor people in his supplementary budget speech.

The red berets said that the budget served as confirmation that government had no practical plans and was unable to act in a meaningful way during the COVID-19 crisis.

The EFF said that the R500 billion relief package announced by Mboweni would only be used to bail out banks and big business.

The party said government had failed to present plans to restructure the country’s battered economy.

“In an attempt to create an impression that the government has an economic plan to deal with the impact of COVID-19, Ramaphosa and Mboweni announced the ill-conceived economic support package which provided for very little additional money as much of the money announced was already in existence, or it is merely deferrals which are not guaranteed,” the EFF said in a statement.

“The supplementary budget also failed to provide detailed practical and believable steps to decisively deal with illicit financial flows, in particular, aggressive tax avoidance by multinational companies.”

WATCH: SA’s debt, unemployment & other points from Mboweni's zero-based Budget

COSATU DISAPPOINTED

Meanwhile, the Congress of South African Trade Unions (Cosatu) described the supplementary budget as disappointing, disillusioning, and uninspiring for a budget of a country in a deep recession.

Cosatu, public sector unions, and other labour representatives were involved in wage talks with government after the latter failed to honour an agreement signed in 2018 to increase workers’ salaries, with plans to cut salaries even further.

Mboweni made no mention of the contentious public sector wage bill in his supplementary budget on Wednesday, leaving trade unions seething.

Cosatu also chastised Mboweni for calling public servants "essential workers" while failing to honour the wage agreement.

“This is not a budget fit for a country that is in deep recession with an expanded unemployment rate of 40%, with more millions of workers facing retrenchments,” said Cosatu’s parliamentary coordinator, Matthew Parks, in a statement.

“The minister rehashed the economic relief measures announced by the president a month ago. Despite the president repeatedly calling for a bold R1 trillion stimulus plan to grow the economy and smash unemployment, there was no such plan tabled today,” he added.

When questioned about the negotiations with the public sector after the presentation, Mboweni settled for wishing the Minister of Public Service and Administration Senzo Mchunu “well”.

Treasury planned to save R160 billion from the public service wage bill in the next three years.

Negotiations with unions over a new deal after the three-year agreement lapsed were also due.

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