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High hopes Mboweni's Budget speech bolsters coffers of crime-fighting units

Finance Minister Tito Mboweni is expected to deliver the 2021 Budget speech on Wednesday, with the hope that more money can be set aside for crime-fighting, including graft receiving special attention.

FILE: Finance Minister Tito Mboweni delivers 2020 Budget Speech in Parliament, Cape Town, on 26 February 2020. Picture: GCIS.

JOHANNESBURG/CAPE TOWN - While there may be little wiggle room as far as the country’s fiscus is concerned, civil society and economists on Tuesday said government would greatly benefit from a budget vote that explicitly laid out plans towards capacitating crime-fighting institutions.

This in the wake of Special Investigating Unit (SIU) head Andy Mothibi describing corruption allegations linked to the procurement of COVID-19 personal protective equipment as unprecedented.

Finance Minister Tito Mboweni is expected to deliver the 2021 Budget speech on Wednesday, with the hope that more money can be set aside for crime-fighting, including graft receiving special attention.

Last year, Mboweni said fighting corruption was a top priority, with the SIU, the Directorate for Priority Crime Investigations and the National Prosecuting Authority (NPA) receiving an additional R2.4 billion.

South Africa over the past year has experienced many lows, including the devastation of COVID-19 and the economic impact of a protracted lockdown.

But it’s the allegations of corruption around PPE – which President Cyril Ramaphosa said wouldn’t happen – that has left many reeling.

Ramaphosa has often talked tough when it comes to corruption, even saying during this year’s State of the Nation Address that it was one of the greatest impediments when it came to growth and development.

Citibank economist, Gina Schoeman, said that it was paramount to show that Ramaphosa’s anti-corruption ticket went beyond just charging people.

She said that there were easy ways to bolster the fight against graft in tomorrow’s budget.

"[We can] increase efficiency, see government's support for crime fighting, while reprioritising other types of expenditure that we don't need towards those entities."

Corruption Watch’s David Lewis said there needed to be resource allocation.

"It might be a good idea for the government to demonstrate that it's taking this outrage seriously and to give an indication on precisely what they're spending on combatting corruption and where they're going to be spending it."

Mboweni delivers his Budget speech at 2 pm on Wednesday.

BAILOUTS FOR SOES?

As Mboweni prepares to deliver the 2021 Budget, one question is whether there will be further bailouts for cash-strapped state-owned enterprises (SOEs).

Some major SOEs have been a major drain on the fiscus.

Mboweni has previously taken a tough line on SOEs, saying there should be no further cash injections and that they should be weaned off the fiscus.

But in last year’s February Budget, he announced R230 billion for Eskom over 10 years and another R16.4 billion financial lifeline for the South African Airways (SAA) to go towards the costs of its business rescue.

Eskom, SAA, Denel, the SABC, SA Express are the big five when it comes to hanging like albatrosses around the neck of the country’s public finances, but the Land Bank is also in trouble and the finance minister may have something to say about the R7 billion it needs.

Chief economist at the Bureau for Economic Research Hugo Pienaar said the past 10 to 12 years had seen “staggering” sums paid out to the big five – Eskom in particular.

“Eskom, SAA, Denel, SA Express and the SABC combined have received - between 2008/2009 and 2019/2020 - R162 billion in bailouts. These are cash injections.”

In terms of loan guarantees to state-owned entities, Treasury figures from last year’s February Budget reflected a total of R484 billion in 2019/2020.

Pienaar said while the country could not do without Eskom, many of the more than 700 SOEs are not essential, including grounded national carrier SAA.

He also said while Eskom acknowledged it could not depend on further bailouts, it had now turned to tariff hikes, meaning ordinary citizens, commerce and industry would still be footing the bill as it tries to get back on a healthy operational and financial footing.

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