Hope that budget speech will focus more on joblessness

A good news budget in which the government commits more spending towards job creation and social relief of distress is what economists are expecting from finance minister Enoch Godongwana.

Economists and trade unions hope that the budget will respond to the problem of unemployment and poverty and give details to some of the commitments announced by President Cyril Ramaphosa in the state of the nation address. 

With tax revenue expected to be as high as around R200bn more than what was estimated a year ago, economist Duma Gqubule believes Gondongwana has a bit of flexibility in ploughing most of the money back into the economy through the Presidential Employment Stimulus, social relief of distress grant and addressing previous cuts in the budgets of the department of education and health.

Gqubule said some of the additional revenue which the government has realised due to the economic boom will be invested back into the economy through supporting the creation of jobs and the relief of distress and  through income support.

“Some of the money will be invested in the social relief of distress grant, about R44bn and the extension of the presidential stimulus package about R9bn, so those are the things that we know will happen,” Gqubule said.

He also called for spending to be channelled through the infrastructure fund which currently has no money. “The government talks about these infrastructure fund but they haven't put any money... we have to start and invest in infrastructure and get this economy going,” Gqubule said.

He said with the additional revenue there's scope for the expanded public works scheme job opportunities to be turned into full-time jobs with improved salaries.

Economist Lumkile Mondi believes the budget would not have much surprises as it looks set to be “pro-business and pro-private sector”.

“I'm not expecting any huge surprises on the tax side, I think we need more money in people's pockets given that the costs are high for many South African consumers, particularly the middle class,” Mondi said.

He said he expected the bulk of the additional revenue which has been raised to go towards the R350 grants.

“Some of it will go towards the cuts that we've seen in the medium-term expenditure we've seen across education and health... there will be sustainability of the spend that we've seen in the previous year,” Mondi said.

Labour federation Cosatu has called for the doubling of the Presidential Employment Stimulus “to ensure it creates at least two million job opportunities to help young people earn a salary, acquire experience, and enhance public services”.

“Funding to extend the R350 grant and narrow the gap with the food poverty level of R624. The Medium-Term Expenditure Framework needs to budget for its extension and use it as a foundation for a basic income grant,” Cosatu spokesperson Sizwe Pamla said.

Cosatu also reiterated its stance of the finalisation of legislation to allow highly indebted and financially distressed workers limited access to their pensions. “This needs to be expedited as millions struggle to survive, care for their families and pay their debts,” Pamla said.

SA Federation of Trade Unions secretary Zwelinzima Vavi called for the reversal of the budget cuts and the increase in spending in critical areas of service delivery.

“We demand that public sector wages are budgeted for  sufficiently so that more teachers, nurses, police, correctional officers, social workers and traffic officers are hired,” Vavi said.

Vavi said they also wanted the government to introduce a monthly universal basic income grant of R1,500 for the unemployed and lowest paid workers.