Supplementary Budget 2020

Justice Malala: 2 key tasks must follow Budget 2019

Government must work on two key areas following Budget 2019, says political commentator Justice Malala: policy certainty and business confidence.

Finance Minister Tito Mboweni delivered his maiden budget speech on Wednesday.

Malala spoke at a post-Budget briefing hosted by Deloitte Africa in Cape Town on Friday. 

"For me there are two tasks that now need to be done," he said. "The government must drastically reduce uncertainty by providing much-needed policy certainty; and secondly, confidence in the country must be built."

In his view, the current uncertainty about policies in SA - including in relation to state-owned enterprises - is far too significant, leaving no room for business confidence to be built.

"Without confidence in the system, no one will put their money here," he said.

'We've gone rogue'

Politicians making contradictory statements do not help, he added.

"Regarding economic growth, SA now seems to be on a path of its own. We have gone rogue on the approach to the economy as we do not seem to follow the advice of anyone else in the world," he said.

"The result is that unemployment and business confidence plummeted and will continue to do so for a long while."

Rot in the system

Although, in his view, there has been progress compared to the previous 10 years, Malala emphasised that the realisation of the "depth and width of the rot in the system" makes him wonder "who was not eating".

He furthermore pointed out that there is still an ideological battle raging in the ANC, between supporters of President Cyril Ramaphosa and those supporting former president Jacob Zuma.

"How Ramaphosa's policy continues over the next few years will largely depend on whether he can manage the relationship with Cosatu and the SACP.

"I was encouraged by Mboweni's Budget. He has begun to lay down some of what he wants to do. It was also encouraging that he said the Budget is in the interest of the country and not in the interest only of any political party," said Malala.

Privatisation 'a dirty word'

"Mboweni also broke with the past in speaking about privatisation, which is a dirty word in the ANC. Former president Thabo Mbeki began with exactly the same reform initiatives in 1999, but Cosatu said he is breaking the alliance decided to find someone else to supported, namely Zuma."

Malala foresees that a big battle will develop regarding Eskom's unbundling, between what the ANC wants and what the unions want. In his view, it might even sour the relationship between Ramaphosa and the unions.

"Ramaphosa's real headache is his problem within the ANC. While we think state capture has been resolved, the faction pushing against reforms at, for instance, the National Prosecuting Authority and at the SA Revenue Service (SARS) is still alive," said Malala.

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