[ANALYSIS] Budget shows Treasury is short of ideas to fix SA's economic woes
from South Africa’s national treasury is the admission that national debt is no longer expected to stabilise. In previous years, bar one brief exception, budgets and medium-term budgets repeatedly promised that debt would stabilise even as previous years’ promises were broken.
Population growth is estimated to be 1.4 percent a year, meaning that economic output per person is declining. In that sense, South Africans are getting poorer. The most notable state-owned enterprises are Eskom and South African Airways. Eskom has been allocated an enormous R112-billion over the next three fiscal years. The national airline will get a minimum of R16.4-billion. The spending on both entities is R60-billion higher than previously planned.
But looking at the new budget proposals together, they amount to the treasury wanting public servants to pay for Eskom bailouts directly from their current and future salaries. The proposal of various trade unionsto relieve Eskom’s debt burden appears to have been disregarded. In the place of that seemingly sincere initiative, the treasury has opted to play a game of brinkmanship. Its proposal on a wage reduction was formally put to unions only the day before it was tabled.
Economic growth is rightly cited as the critical issue. Within that, “adequate electricity supply” is a priority. Yet the treasury continues to rest heavily on rhetoric about private sector participation in the generation of electricity without providing even the most basic information.
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