ANC Caucus Statement on the 2020 Budget

26 February 2020

The ANC Parliamentary Caucus welcomes the 2020 budget speech as delivered by the Minister of Finance, comrade Tito Mboweni, in the National Assembly today.

In the face of challenging global and domestic economic conditions, this budget balances the need to stimulate economic growth, reduce wasteful expenditure, protect and support the poor, increase revenues and contain debt. There is common consent that we need higher levels of GDP to deal with unemployment and poverty, the debt and the spiking interest costs.

The budget directs spending to our most pressing national priorities that of educating the youth, protecting the vulnerable and investing in enablers for inclusive growth. It is a budget of reconfiguration of our national revenue, in which capital spending is the fastest growing component of non-interest spending, which is complemented by the Infrastructure Fund which over the next three years through blended finance mega projects at least R200 billion will be funded.

Key for many are the announcements on the progressive taxation regime, keeping individual tax steady whilst addressing the deficit through broadening the corporate tax base, which is envisaged will reduce the actual corporate tax. Tax relief is proposed to stimulate growth. For lower income earners the percentage relief is considerable as much as 10% for those earning R10, 000 per month.

With regards contributing to the environment, the Budget assists the green economy underscoring the vision of the ANC on Carbon tax, evidenced by the fact that R1,75 Billion will come into the fiscus over the next few months as well as discouraging the proliferation of plastic bags through increasing the levy on plastic bags.

We further welcome the fact that Budget has not succumbed to conservative sectors in our economy who were calling for a change in VAT as the easy way to narrow the budget deficit.

The proposals to ensure a stable supply of electricity is critical in order to achieve the predicted 0, 9% GDP growth. The changes confirmed in the electricity regulatory framework will help in this regard.

On Youth Employment, the figures from the Jobs Fund projects reveal that 65% of the more than 175,000 permanent jobs and almost 60,000 short- term jobs went to the youth.

The Budget correctly raises the concern of increased liabilities in the Road Accident Fund and the associated risks to the fiscus. In this regard, the option to introduce compulsory third-party insurance is welcomed.

The quality of spending is a recurring theme in the Budget and supports the oversight work that Caucus is seized with. This underscores the importance of what the Budget refers to as “the appropriate mix of quantity, quality, capacity and capability in the administration of the State.” In this regard, abolishing the current wasteful subsidence and travel system model and replacing the current cell phone policy and requiring economy class travel are important indicators.

On State Owned Enterprises, we welcome the proposed new law to end the excessive salaries paid to officials in the entities and a review of leasing arrangements with regards government buildings. The restructuring of state owned enterprises, comprehensively discussed in the ANC, sees the Budget allocating R230 billion over the next 10 years to restructure the electricity sector, whilst renewable energy programme are being fed into the network.

With regards support to the ANC’s Social Transformation project, learning, culture, health and social development all receive the largest contributions from the Budget. The increases in social grants is largely in line with inflation.

With regards support to our commitment to grow the African continental economy, the Budget provides support to cross border financial transactions to stimulate trade and investment.

Critically, the call in the ANC to strengthen the Industrial Strategy sees the Budget practically respond through the financing of an Innovation Fund, Industrial Business Incentives of R18, 5 billion aimed at creating and retaining almost 57,000 jobs and refurbishing Industrial Parks in townships and rural economies.

We welcome the additional R2,4 Billion commitment in the Budget in the fight against corruption, which will go to the NPA, the Special Investigating Unit and the Directorate for Priority Crime Investigation. In particular, this additional money will go directly to appointments, dealing with backlogs and cases that need to be pursued arising from the Zondo Commission. We welcome the peer review currently being undertaken into the Country’s money laundering system in strengthening the fight against illegitimate and illegal flows.

This budget reaffirms ANC resolutions and commitment to better the lives of South African citizens. As the Finance Minister said, “Our economy has won before, and it will win again”. It is only through actively working together as government, business, civil society and the general public that we can achieve economic growth and stability.

Issued by the Office of the Chief Whip, Comrade Pemmy Majodina


Nomfanelo Kota
Acting Caucus Spokesperson