Finance minister warns “we cannot have all things we want at the same time” and tables cuts in things like the public wage bill in a R1.84 trillion budget. Budget2020
South Africa’s growth prospects remain timid as Eskom’s load shedding continues to constrain the economy. Government spending has also continued to surpass revenue, a trajectory that the minister of finance, Tito Mboweni, is trying to curb in this year’s budget.
To service the plants, Eskom has started implementing rotational load shedding, with chief executive André de Ruyter saying that this will be done over the next 12 months.The lacklustre economic environment has led the national treasury to forecast economic growth of 0.9% in 2020, 1.3% in 2021 and 1.6% in 2022.
“A key driver of the widening deficit has been a sharp decline in nominal GDP since 2018/19 and [the drop in] associated tax revenues,” Treasury documents — released as part of the budget speech — said. One of the key ways to decrease spending is by reducing the public wage bill which accounts for 35% of the consolidated budget. Mboweni plans to save R37.8 billion in the next financial year.
Mboweni said they have been engaged with stakeholders and workers regarding the reduction and so far, they believe they will meet Treasury halfway. This proposal has already angered public sector unions, including the Police and Prisons Civil Rights Union and trade union federation Cosatu.
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