Finally, (it feels like) we have a Budget! Actually, it’s only been a few weeks, but it has felt like an eternity. Once again, it seems SA has gone to the brink and pulled back, underlining SA’s sad modus operandi of policymaking by the seat of one’s pants.
And before breaking out the Champagne, saying SA now has a Budget might be pushing it a bit because just before the Budget Speech delivered by Finance Minister Enoch Godongwana, DA leader John Steenhuisen dropped a mini bombshell, announcing the DA would “not support the Budget”. So will it be passed? We wait in anticipation.
So, is the DA right to oppose the Budget, or is it playing to the gallery? I think this is one of the difficult questions that will face the South African public. To put it another way, given the concessions the ANC has made, cutting the VAT increase in half, is the DA justified in not compromising? Or, is it just grandstanding and showboating, and pandering and and and.
It certainly seems as though Godongwana has changed his approach. The first Budget Speech 2025 (the one that wasn’t delivered on February 19) included just two sentences on cost-cutting. It said, “Reforms to the Budget process are underway to eliminate inefficiencies, waste and duplication. This will be supported by spending reviews to ensure programmes are effective, economical and maximise value for money.”
In the second Budget Speech, the one that was given on 12 March, he was positively effusive about cost-cutting. Two pages of a 27-page speech were devoted to cost-cutting. He acknowledged (the obvious) that “over time budgets tend to grow incrementally, often carrying forward historical allocations, without necessarily reflecting the evolving needs of our country”.
This approach, he said, has led to “inefficiencies, misalignments, duplications and, in some cases, the continued funding of programmes that do not yield the intended impact”. These are strong words.
There was even an apology of sorts. “We are not deaf to the public’s concern about wasteful and inefficient expenditure.”
And then the solution: “As National Treasury, we are ready to take the lead to improve the effectiveness and efficiency of spending.” The review will go beyond “mere cost-cutting” and there will be “significant changes to the Budget process”.
And, to top it all, President Cyril Ramaphosa has also undertaken “to establish a committee between the Presidency and Treasury to identify waste, inefficient and underperforming programmes”. A committee! Wonderful. What a brilliant idea.
One doesn’t mean to be overly cynical here … wait a minute. Is it possible to be overly cynical here?
Well, we could check by taking time to examine the actual documents. The first is the spending breakdown from the aborted February 19 Budget Review. The second is the breakdown from the Budget Review published yesterday.
As you can see, there are some modest changes. Compensation of employees actually comes down a bit because, for some reason, Home Affairs is getting snipped. All the others stay the same. Goods and services stay the same. Capital spending stays the same.
Transfers and subsidies come down a bit because social protection has been trimmed. Interest payments go up, as you might expect, since the government has to borrow a bit more. But when all is said and done, government expenditure is down a mere R8.5-billion out of a total expenditure of 2.6-trillion.
So, if the government is actually committed to spending less, the best you can say is that it’s not evident from the discussions over the past week. The ANC is fundamentally a tax-and-spend government, and shaking that approach to life has not been changed over the past three weeks – Budget crisis or not. The lack of action on this front does suggest the DA might not be entirely grandstanding in its decision to hold off supporting the Budget. DM
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