Director of the Institute for Economic Justice, Gilad Isaacs says government’s financial support alone will not prevent the risk of social unrest in the country. On Wednesday, Finance Minister Tito Mboweni expanded on President Cyril Ramaphosa’s recent announcement of about R36 billion of relief measures to support businesses and individuals affected by the recent unrest in KwaZulu-Natal and Gauteng as well as COVID-19 lockdown restrictions.
He said government’s improved revenue collection and shifting around some spending made the allocation possible. Isaacs says the measures that Mboweni announced lack clarity.
“One of those in business grants, second is in funding the presidential employment stimulus, third is in ensuring that support is more easily accessible, fourth is in indicating that there was an increase in security as the president said in securing of the basic income grant. And then lastly, various targeted interventions,” says Isaacs.
Treasury’s relief package is not enough: Dr. Gilad Isaacs
Meanwhile, the government says better than expected performance in corporate income tax from mining, manufacturing, the financial services sector have helped to fund the latest relief measures that government has provided.
“Of the overall package, about R2.5 billion is being sources from reprioritisation, so together the overall amount that will be focussed on this comes to R38.5 billion. So it’s R36.2 billion of new spending and R2.65 billion of reprioritisation. Now as required by Section 32 of the PFMA the National treasury will publish the quarterly revenue and spending position of government at the end of this week,” says Edgar Sishi, Chief Director at National Treasury.
However, Chief Executive Officer (CEO) of Business Unity South Africa Cas Coovadia says although a lot of work still needs to be done, National Treasury has given the country a clear sense of direction.
“A lot of work still needs to be unpacked, National Treasury has given us a good sense of what is being done and also has given us information that is important in a broader, economic and fiscal situation we find ourselves in.
Reaction to Treasury’s support package: Prof Patrick Bond