Treasury outlines how funds will be reallocated to help SAA

National Treasury has outlined how R7 billion will be removed from allocations like local government and municipal infrastructure grants among others as the President Cyril Ramaphosa administration seeks to reduce national debt.

These include a reduction of R336 million from the school infrastructure backlog grants, R240 million from the National Health Insurance fund and R273 million from the provincial emergency housing fund among others.

Senior economist for Intergovernmental Policy and Planning at National Treasury Olorato Tlhoaele was briefing a joint meeting of the Standing and Select Committees on Appropriations.

“There are reductions that have been made to national programs and as part of those reductions, provincial conditional grants were also identified as areas where reductions should take place. The purpose of making these reductions was to cater for the rescue plan for South African Airways. So, in total with regard to provincial conditional grants there is a reduction of R1.3 billion,” says Tlhoaele.

Members of Parliament have expressed concern about government’s decision to cut funding to important programmes in order to fund SAA.

Members from across political parties questioned the decision, especially as it affects projects like the municipal infrastructure grant, the public transport network grant and the integrated national electrification programme.

Some MPs wondered if the R10 billion allocated to SAA was not in conflict with the President’s commitment to an infrastructure-led economic recovery as it could take cash away from such projects.

ANC MP Dipuo Peters says, “The move of R1 billion from the police when crime is such a serious challenge in our communities,  we are always informed that the police don’t have vans to respond to call outs. We are told they’ve got serious challenges of other resources that are essential for them to fight crime. If you look at budgets of Human Settlements, Water, Transport and in particular roads, the school infrastructure grants, are we not sending a wrong message?”

Delivering his Medium-Term Budget Policy Statement in Parliament last month, Finance Minister Tito Mboweni said R10.5 billion has been set aside for SAA to settle its guaranteed debt.

The Minister also announced that there will be a wage increment freeze for three years for public servants and representatives.

Minister Tito Mboweni delivers Medium-Term Policy Statement: 

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Source: SABC News (