WATCH LIVE: Finance Minister Tito Mboweni tables MTBPS 2020
LIVE BLOG: Not true that R500 billion relief package entirely lost to corruption - Mboweni
All eyes are on Finance Minister Tito Mboweni as he tables his mid-term budget review in Parliament this afternoon.
"e also wish to thank the Governor of the South African Reserve Bank, Mr Lesetja Kganyago and his staff for their cooperation with us. A special word of thanks goes to the Deputy Minister of Finance, Dr David Masondo, and the Director-General of the National Treasury, Mr Dondo Mogajane, and the team for their courage, hard work and commitment."
The Medium-Term Budget Policy Statement coincides today with another important process, the tabling of the tax Bills. I am grateful to the Standing and Select Committees on Appropriations and Finance. They have the responsibility for steering the consideration of the tax bills, giving effect to the revenue proposals as announced in the 2020 Annual Budget in February and related tax administration matters. They will also consider the 2020 Division of Revenue Second Amendment Bill and the 2020 Second Adjustments Appropriation Bill
"Today we embrace our higher purpose as citizens and leaders to take forward the vision of nation-building. Together we can shape a new destiny for our great, vibrant, beautiful country. Our thanks go to the President and the Deputy President for their support, Cabinet colleagues, the members of Ministers’ Committee on the Budget, the MECs of Finance (Team Finance)."
"We must continue to defeat the corrupt and plug the loopholes. Efforts to support a rapid response to COVID-19 underline the need for comprehensive procurement reforms. The National Treasury has withdrawn the emergency procurement instruction note and required all state bodies to revert to normal procurement processes. Procurement is now slowed down due to a few scoundrels who put themselves ahead of the country, and we must all suffer."
"R10.5 billion is allocated to SAA to implement its business rescue plan. This allocation is funded through reductions to the baselines of national departments, public entities and conditional grants. This allocation is in addition to the R16.4 billion allocated over the 2020 MTEF in the February Budget for settling guaranteed debt and interest."
"Zero-based budgeting will be piloted at the Department of Public Enterprises and National Treasury next year. It will be fully integrated into the budget system by the 2023 Budget. In practice, it will mean programme-byprogramme and project-by-project analysis. We must discard those things that we no longer need to do and scale up those that are essential for progress."
"Still we cannot expect our civil service to carry the burden of nation-building alone. Consideration should be given to the proposal for across-the-board compensation pay reductions to management-level positions, across national, provincial and municipal governments, state-owned entities all other senior public representatives."
Amongst other things, we will:
1. Make it easier to do business. We must remove the needlessly complex red tape that increases the cost of doing business
2. Create stable and predictable policies. As we rebuild, there must be universal understanding of the policy trajectory of our government. It is not only investors that need confidence, but also the average South African
3. We must use our ingenuity and adapt after the ravages of the pandemic 4. Embrace a sustainable future, and work towards a green and just transition
"In June, we published the medium-term spending plans and long-term debt projections to spark robust debate on our fiscal path – here in this House, within government, with community activists, with civil society, with the trades union movement, with our provincial and municipal colleagues, on Twitter, with small and big business, and in opinions expressed through media platforms."
"As we chart our way forward, we are reminded of the grizzly sea captain in Samuel Coleridge’s poem, the Rime of the Ancient Mariner, who is hit by a great tempest that throws his ship off course.
"To quote: “And now the STORM-BLAST came, and he Was tyrannous and strong: He struck with his o'ertaking wings, And chased us south along.”
"Government has broadened its financing strategy to include drawing down on sterilisation and foreign currency deposits. We are also borrowing at favourable rates from international finance institutions. The MTBPS Review and Adjusted Estimates of National Expenditure provide greater detail on our fiscal and borrowing plans."
"Altogether, the in-year revised main budget deficit is now expected to be R707.8 billion, a little better than the Special Adjustments Budget. As ratio of GDP, it is unchanged at 14.6% of GDP. The consolidated deficit is also marginally better in rand terms, but unchanged at as proportion of GDP at 15.7%."
"During the lockdown, cash grants were paid to over 22 million people, nearly half of the population. To reach the poorest South African households, we expanded social protection. Seven million people accessed the Temporary Employment Relief Scheme through the Unemployment Insurance Fund. The Special COVID-19 Social Relief of Distress grant reached six million people."
In April this year, government announced a major fiscal relief package of around R500 billion or 10 percent of GDP, including:
1. More than R30 billion for health and other frontline services
2. Support vulnerable households which is now in excess of R50 billion
3. More than R40 billion for wage protection through the UIF
4. Around R100 billion for job creation initiatives, which will now be spread over the MTEF
5. R200 billion for a credit guarantee scheme
6. R20 billion towards municipalities to assist them with COVID-19 related activities
7. R70 billion towards emergency tax measures
"The NEDLAC constituencies also agree to accelerate the introduction of auto-enrolment for all employed workers, and the establishment of a fund to cater for workers currently excluded from pension coverage, as an urgent intervention towards a comprehensive social security system. Government will present legislation next year to allow for limited pre-retirement withdrawals under certain circumstances linked to mandatory preservation requirements.
"In the area of social protection, we are happy to announce a historic agreement with all NEDLAC constituencies for the annuitisation of provident funds beginning in March 2021, which will enable all workers to continue to enjoy tax deductions on their contributions. We thank the labour constituency for identifying appropriate annuity products for low income workers."
"Operation Vulindlela is a critical coordination tool to unlock and fast track implementation of the structural economic reform agenda. Deputy Minister David Masondo is leading this initiative, and a technical team, headed by Dr Sean Phillips, will draw on expertise and capacity from the public and private sectors. This will ensure that implementation is well coordinated, sequenced and timeous."
"Government has initiated a process to review Regulation 28 to make it easier for retirement funds to increase investment in infrastructure -should their board of trustees opt to do so. At all times, trustees are expected to put the interests of retirement fund members first. A draft gazette will be released in due course for public comment. "
"The Budget Facility for Infrastructure will support new projects, including through blended finance in partnership with the private sector. These include hospital projects in KwaZulu-Natal, such as the extension of Chief Albert Luthuli, and the Western Cape, like Tygerberg and Klipfontein. There are exciting new proposals for the development of more than 12 harbours in the Eastern Cape, KwaZulu-Natal, Northern Cape and Western Cape."
Mboweni will map out spending plans for the next three years and reflect on the current situation the country finds itself in, months into the COVID-19 pandemic and a lockdown that almost brought the economy to a standstill.
Mboweni will today reveal the extent of the government’s tax revenue shortfall, estimated at more than R300 billion.
He is also expected to announce a R10.5 billion bailout for South African Airways, which the opposition democratic alliance says could be better spent on improving ordinary people’s lives.