With first MTBPS, Godongwana under pressure to implement basic income grant

Analysts believe that Thursday's Medium-term Budget Policy Statement will bring with it some good news in the form of a tax overrun, thanks to runaway commodity prices.

New Finance Minister Enoch Godongwana at the swearing in ceremony at the Union Buildings in Pretoria on 6 August 2021. Picture: GCIS.

CAPE TOWN - All eyes will be on Parliament on Thursday as the new finance minister delivers his very first budget address, with expectations of a revenue windfall to boost the mood.

Enoch Godongwana is facing increasing pressure from various quarters to expand government spending to implement a basic income grant, especially in the wake of July's riots and looting.

Analysts believe that Thursday's Medium-term Budget Policy Statement will bring with it some good news in the form of a tax overrun, thanks to runaway commodity prices.

It's a welcome change from a run of bad news but it's likely to be short-lived and as Citibank's Gina Schoeman explains, government expenditure increased in the last year.

"We've had the fiscal stimulus from lockdown and the social unrest, we've had the social relief of disress grant, we've had tons of bailouts from provinces who can't pay their bills to state-owned enterprises."

Analysts and investors will be looking closely for signs that government is serious about managing its spending.

Stellenbosch University's Dr Krige Siebritz said that the minister would have to address longer-term policies too.

"We need a sign that there are constructive and realistic plans for fixing the public finances and getting the growth agenda going," Siebritz said.

Finance Minister Enoch Godongwana will deliver his first Medium-term Budget Policy Statement in Parliament on Thursday afternoon.