How the stresses and strains on SA’s economy played out in Parliament
Lawmakers had to consider, debate and approve not one, but three Budgets this year while operating under lockdown.
CAPE TOWN - Lawmakers were under the whip more than usual this year – not least because they had to operate under lockdown, but they also had to consider, debate and approve not one, but three Budgets.
The national state of disaster and hard lockdown were declared just a month after Finance Minister Tito Mboweni tabled the February Budget, when the economy was already limping.
But the urgent need for the government to respond rapidly to the demands of the COVID-19 pandemic – to find funds to buy PPE, support businesses and employees suddenly without work as the economy came to a virtual standstill – meant that a new, emergency Budget had to be pulled together in record time.
How did the stresses and strains on the economy play out in the national legislature?
Lawmakers had to work fast to consider and approve Mboweni’s February Budget – something that had to be done before he could table his emergency Budget in June to provide the funds for the government’s response to the pandemic and lockdown.
Then there were a few short months to approve the new Budget before Mboweni tabled his Medium-Term Budget Policy Statement (MTBPS) in October, which revealed the extent of the fiscal crisis the country found itself in.
“We must now rally behind fiscal rehabilitation and growth. Right now, the government is borrowing at a rate of R2.1 billion a day. This cannot continue.”
WATCH: Mboweni: Government is borrowing at a rate of R2.1 billion per day
Economists warned that South Africa had reached the brink of a fiscal cliff. Mboweni, speaking at a gathering in Stellenbosch, sounded his own warning:
“We cannot any longer live beyond our means, we have to live within our means otherwise we are in trouble. And the fiscal crisis is on its way by 2024-25 if we don’t take the serious measures we need to take to close the mouth of the hippopotamus.”
Mboweni’s MTBPS relied on reducing the public sector wage bill to help shrink the budget deficit and stabilise debt over the next five years, so that public finances can return to a sustainable position.
At the same time, it provided R10.5 billion for South African Airways’ business rescue – the money coming from deep cuts in education, policing and other areas.
The next hurdles will be the public service wage talks and then the main Budget in February next year. The economy may have bounced back out of recession, but it has a long way to go to reach anything like a full recovery, and the numbers are sure to reflect that.