Consolidation, reform and growth formed the basis for discussions during the National Treasury’s 2020 Budget presentation hosted by the School of Accounting, Economics and Finance (SAEF).
National Treasury Directors of the Budget Process, Mr Steven Kenyon and Mr Andisile Best, explained to the gathering how the 2020 budget was designed, taking into consideration South Africa’s economic situation.
‘This year’s budget focused largely on social services that benefit the poor,’ said Kenyon. ‘The economic outlook is weak and we are not pretending we have large revenue or that we are going to spend money that we do not have,’ said Kenyon.
The presentation detailed how halting fiscal deterioration, improving spending efficiency and reducing waste required:
‘Everyone is surprised we didn’t increase tax as we had said we might. Rather we scrapped that idea as we wanted to give income earners relief and felt that an increase would do damage to the economy, which is fragile at the moment,’ said Kenyon.
‘There has been an improvement in the governance of municipality funding but the funding of State Owned Enterprises (SOEs) is placing tremendous pressure on the budget. Insufficient progress on Eskom reforms and its financial position and the Road Accident Fund are the next liabilities. A decision on the Road Accident Benefit Scheme Bill is required to pave the way for a more affordable system,’ he said.
In the area of finical literacy, Best demonstrated how the Treasury’s new online Budget Data Portal – Vulekamali – designed to help people understand the country’s finances in a simple way – really works. The online portal allows users to explore and download datasets and resources.
Kenyon and Best interacted with the audience through a question and answer session where students raised topics such as sustainable fee free education, the taxing of middle class earners versus high earners and the background to how Budget decisions are made.
SAEF’s Dean and Head, Professor Mabutho Sibanda, said the Budget summary and debate were very relevant considering the recent news that South Africa had slipped into a technical recession.
‘We need to be enlightened on what is happening with our economy especially when it comes to government debt, spending, and the plans to boost economic growth. We are proud of the relationship we have with Treasury and appreciate the opportunity to get a detailed and complete overview of the national Budget.’
Words: Thandiwe Jumo
Photograph: Albert Hirasen