Finance Minister Enoch Godongwana will table his first medium-term budget policy statement (MTBPS) under the Government of National Unity (GNU), facing pressure to fund the education budget shortfall, announce bold action to stimulate the economy and not implement budget cuts, among others.
The statement will outline the government’s spending priorities over the next three years. However, economists don’t expect major announcements in Godongwana’s statement, which comes just a day after his party, the ANC’s national executive committee acknowledged the immense pressure the rising cost of living placed on households.
Independent economist, Professor Bonke Dumisa, said he did not expect any “fireworks” because they are normally saved for the Budget speech in February.
Dumisa said everyone wanted to see a caring government, but the government has debt close to R6 trillion and the debt to GDP ratio was at about 70%.
“The people expect the government to say we have GNU because DA ministers are calling for more money for their departments and yet when they were in opposition they used to say the government can’t spend money they don’t have. I don’t see how the government will spend more money on anything.”
Dumisa said Godongwana will however be forced to spend on infrastructure development.
“With all the potholes on the roads, it is not sustainable for the economy.
It affects the smooth running of the economy. You may have more money allocated to infrastructure, that includes money to Transnet,” he said in reference to the government’s plan to move cargo from roads to rail.
He speculated that Eskom, which has not implemented load shedding for months now, may get some funding amid opposition to its request for a tariff hike.
“I don’t see them (National Treasury) doing the same to the other many SOEs that we can do without,” Dumisa said.
Efficient Group chief economist Dawie Roodt said the MTBPS was not a platform for “surprises” but about inflation targeting, among other things.
“The Minister of Finance is to report back on what is going on in the economy. This is an opportunity to report back on the state’s finances and how the revenue tax collection is doing. This is not really a platform to make adjustments,” Roodt said.
He did not see Godongwana bending to the ministers calling for more funding of their departments.
“The whole budgetary process is well established. The ANC is still a dominant party. There are no real political demands from departments asking for more money,” Roodt said, adding that there may be word on the future of the R350 grant that is due to come to an end next year.
Cosatu general secretary Solly Phetoe said Godongwana should announce measures to resolve unemployment, poverty and inequality, and steer clear of austerity measures.
“What is disappointing about this GNU is that they speak about austerity measures but they increased the executive. It means the money that was used to implement service delivery to the people is now being given to the bloated executive,” Phethoe said.
He also said the labour federation, which will lead a picket with civil society groups outside Parliament ahead of Godongwana’s speech, demands a bold and progressive budget that will stimulate economic growth, spark job creation and enable the delivery of quality public services. “This is an issue as Cosatu we are to raise. We need a people’s budget.
We don’t need an austerity budget,” he said, adding that the R350 social relief of distress grant should be increased.
The Federation of Unions of South Africa (Fedusa) said Godongwana should ensure that the MTBPS eased financial burdens that are mounting on households through truly meaningful steps against rising costs in areas such as transport, fuel, and electricity.
“Fedusa is concerned that the government’s tendency for mere incremental measures and ongoing budget cuts will worsen economic hardship already experienced by households and businesses alike, with negative implications for overall economic stability,” the labour federation said.
BOSA voiced its opposition for any reductions in the education budget and urged the government to identify alternative funding sources.
“The estimated R79 billion cuts to the education budget threaten to eliminate nearly 3 000 teaching posts, resulting in larger class sizes, overworked teachers, and diminished quality of education. This is not just about protecting jobs; it’s about safeguarding our children’s future and ensuring every child has access to quality learning conditions,” BOSA said.
Stop Budget Cuts, a coalition of trade unions, said when the government cuts funding for essential services, it’s not just reducing numbers in a budget but taking away life-saving healthcare, quality education, and safety from communities.
“And let’s be clear, these cuts hit the poor, the elderly, and the already marginalised the hardest.
The privileged and wealthy can pay for private alternatives, but many of us do not have that luxury,” read a statement on behalf of the organisations.
Cape Times