Godongwana’s Budget hailed for balanced approach, bringing relief to consumers

Tabling the national budget at Parliament on Wednesday, Godongwana announced no major tax increases, saying this was not the time, given SA’s fragile economic recovery.

Finance Minister Enoch Godongwana at a briefing ahead of his maiden Budget Speech on 23 February 2022. Picture: GCIS.

CAPE TOWN - Finance Minister Enoch Godongwana’s maiden Budget speech has been mostly hailed for a balanced approach that brings much-needed relief to hard-pressed consumers.

Tabling the national budget at Parliament on Wednesday, Godongwana announced no major tax increases, saying that this was not the time, given SA’s fragile economic recovery.

With the mining commodities boom bringing in much higher than expected tax revenue, Godongwana has used the projected R182 billion bonanza to pay down some of the government’s r4 trillion debt, increase support for the poor and unemployed and boost the coffers of government departments hard-hit by budget cuts.

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He is putting more than R5 billion back into people’s pockets through tax relief and kept fuel prices down by not increasing either the general fuel or the road accident fund levy but smokers and drinkers will pay more and sugar and carbon taxes will rise.

Godongwana said that the country faced steep and daunting challenges: “But we will overcome. To do so, we need to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. The budget presents this balance.”

After 10 years of little economic growth, Godongwana said that there was hope, but he warned that South Africa was not yet out of the woods.

“Our economic recovery has been uneven, and risks remain high. We must proceed with caution,” Godongwana said.

But the tax overrun has enabled him to give consumers much-needed relief and reduce government debt, while at the same time increasing support for the poor and unemployed.

The aim is to get the economy firing on all cylinders so that people can find work. Godongwana said that 46% of the South African population now received some form of grant to help them survive.

“The improved revenue performance is not a reflection of an improvement in the capacity of our economy. As such, we cannot plan permanent expenditure on the basis of short-term increases in commodity prices,” he said.

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