With Finance Minister Tito Mboweni’s Adjusted Budget Speech a day away, economists and activists do not predict good news, saying the Budget would be “painful”.
Mboweni will present a radically revised emergency budget on Wednesday with significant holes on income as the coronavirus pandemic has all but wiped out the fiscal space to manoeuvre.
Experts are already mulling on the worst-case scenario of a 16 percent economic contraction and an R285 billion revenue deficit.
Efficient Group chief economist Dawie Roodt felt a “painful” budget was the sad reality.
Reacting to whether or not Mboweni was going to bail out ailing SAA, Roodt pointed out that South Africa was already running a huge budget deficit. “We literally have no money,” Roodt said.
Pietermaritzburg Economic Justice and Dignity Group’s Mervyn Abrahams said: “It is going to be a difficult Budget. It comes at a time when there is diminished government revenue. What will be critical is to get the economy up and running again. This is going to be difficult as the South African economy was already in a recession before the coronavirus hit the country.”
Community activist Desmond D’Sa advised the government not to embark on any big infrastructure projects.
“Since the pandemic things will never be the same. The Budget has to be put into health. We can’t do big infrastructure projects,” D’Sa said.
Cosatu’s Edwin Mkhize said the trade union federation wanted clear plans from the minister to deal with a number of issues. He said they did not want Mboweni to provide reasons why he wants to retrench people.
-Daily News
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