The country’s labour sector has expressed mixed feelings about the 2024 Budget Speech by Finance Minister Enoch Godongwana.
The budget saw an increase in funding for apex departments and cushion the poor from cost containment.
The education sector has been allocated an additional R25, 7 billion, health will see an allocation of R848 billion while the police will see a total of R765 billion for peace and security.
But both the workers and political parties have raised concerns on allocation to struggling state owned entities, high unemployment rate and government’s announcement of tapping into reserves with some describing the delivery as an elections budget.
A tough balancing act for Godongwana who admitted in his speech that over the past 30 years, South Africa has been on a mission to restore social and economic justice and to bring about equality, however the country has experienced challenges over an economy that has failed to grow. But he says there is hope with the country’s economy is projected to see growth.
“Between 2024 and 2026, growth is projected to average 1.6 percent. The growth outlook is supported by the expected easing of power cuts as new energy projects begin production, and as lower inflation supports household consumption and credit extension. But there are also risks to the domestic outlook. These include persistent constraints in electricity supply, freight rail and ports, and a high sovereign credit risk. Our challenge, honourable members, is that the size of the pie is not growing fast enough to meet our developmental needs,” says Godongwana.
This has been welcomed by the workers following an announcement of investments in social security for apex departments and a move to not increase the fuel levy.
“The only element that brings us a degree of comfort is only but two, number one that there has not been an increase in the general fuel levy and this most certainly brings relief to millions of commuters and workers at the same time but secondly that the minister had heeded caution in terms of the additional allocations that have been brought forward to the budget in terms of education, health and police in particular and at the same time the allocation to the NHI,” says FEDUSA’s Riefdah Ajam.
Labour federation COSATU has described Godongwana’s budget as a mixed bag, saying that it did not address the federation’s hopes for a budget that would grow the economy.
“We think it’s a mixed bag, there’s some good things, there’s some things that we were quite disappointed by. We appreciated it’s under quite difficult circumstances for government but we had really hoped to see a much more progressive budget which is going to grow the economy, reduce unemployment, really escalate the fight against crime and corruption. We didn’t really get that out of the budget. So, there are some positive things about getting debt relief to Eskom, giving some additional loans, getting to support Transnet, those are critical. We support withdrawing some of the reserve funds in the Reserve Bank to help government plug fiscal holes but we don’t really see how it is going to get us out of this economic rut and what’s going to get us out of this rut fast enough,” says COSATU’s Matthew Parks.
COSATU has, however, welcomed progress announced on the two pot retirement system.
Although workers have welcomed announcements in the budget, political parties have been left unsatisfied. Opposition parties have accused the Finance Minister of failing to present an economic growth stimulus but of electioneering ahead of the May 29th elections.
“It’s an election budget, they try to talk about increasing social grants, the first one will come now and the second after elections so they are saying if you vote for us, we will reward you in October,” says the UDM’s Nqabayomzi Kwankwa.
“He appears to be taking at least R150 billion from the contingency reserve which we don’t think is a good idea, throwing it into a hole that is actually not going to get plugged. That’s the key thing because the spending is the problem and of course growth,” says the DA’s Dion George.
“To cut on NSFAS massively like that is an insult to young people of this country, to not have plans on how we are going to grow the economy of this country, to not have a plan on how our municipalities are going to be enhanced and strengthened in terms of more budget,” says the EFF’s Veronica Mente.
“He is tapping into the reserves which is a clear admission that they failed to ignite our economy, we can’t be excited about that. All departments are underperforming some have even failing to spend the allocations,” says the IFP’s Mzamo Buthelezi.
“We are supportive of the minister’s approach, very balanced acknowledging that the economy has not fully recovered and he has said he has put more money on the economic growth areas like rail, electricity and other infrastructure. He has also prioritized reducing government debt and the servicing of the debt,” says the ANC’s Gwen Ramokgopa.
With the polls in two months’ time, the Independent Electoral Commission (IEC) has been allocated an additional R2,3 billion, an additional R350 million for the police to support the elections and a further R200 million for political party funding ahead of the elections.
Video: Budget 2024 – Economists and politicians react
