Government accused of dishonesty in how budget is presented

The Budget Justice Coalition (BJC) says it is concerned about the increasing dishonesty from government in how the budget is presented.

The rights group was reacting to Finance Minister Tito Mboweni’s supplementary budget, announced on Wednesday.

The budget included a revised fiscal framework and spending plans. Mboweni revealed that only R36 billion of the R500 billion economic relief package is new money allocated in the fiscus this financial year.

BJC demands that government be more transparent about its plans and involve all sectors of society in the “zero-based budgeting” decisions that aim to slash a further R231 billion from spending in the 2021 Medium Term Expenditure Framework.

“This is not even close to a “stimulus” or even an adequate relief package, at a mere 2% of non-interest expenditure (proposed in the February budget). In fact, in many cases, social sectors like basic education have less money to spend than was allocated to them in February, despite the additional burdens placed on them by the pandemic.”

Below is Mboweni’s full budget speech: 

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While the lockdown slowed the initial rate of coronavirus (COVID-19) infection and provided space for the country to prepare for rising numbers of cases, families, workers, businesses and communities are facing immense economic hardships.

According to Mboweni, R2.9 billion of net additional funding is provided to the entire health sector to cope with the pandemic.

The infographic below gives a breakdown of the supplementary healthcare budget:

However, BJC says, “This is less than half of the new funding allocated to the South African National Defence Force and South African Police Services (R6.7 billion), highlighting how draconian and misdirected the overall response by the government has been, especially in townships.”

BJC says no solidarity tax measures on high incomes, wealth or financial assets to help plug the revenue shortfall were announced.

“Poor administration and exclusionary criteria mean that the COVID-19 special grant is not reaching millions of people, who desperately need it – including unemployed foreigners residing in South Africa and unable to return home. Government should consider an administratively simpler basic income grant instead, funded by progressive taxation of wealth, high incomes and income from wealth.”