Supplementary Budget 2020

Mboweni's adjustment budget will be the 'most significant in recent history', says DA

DA spokesperson on finance Geordin Hill-Lewis.
DA spokesperson on finance Geordin Hill-Lewis.
Jan Gerber, News24
  • Minister of Finance Tito Mboweni delivers an adjustment budget in response to the Covid-19 pandemic on Wednesday. 
  • Opposition party the DA says low economic growth and high debt have impacted on SA's ability to save in times of plenty, and to spend in a time of crisis.
  • It requires a "resilience budget" - which acknowledges that neither austerity nor a big expansion in spending is possible.


The Democratic Alliance expects a "resilience budget" from Finance Minister Tito Mboweni when he tables an adjustment budget on Wednesday, in response to the Covid-19 pandemic.

At a press briefing on Monday, DA spokesperson on finance Geordin Hill-Lewis said the ruling African National Congress would be tabling the supplementary budget with "blood on its hands".

He was joined by interim party leader John Steenhuisen, deputy finance spokesperson Dion George, and DA policy head Gwen Ngwenya.

Steenhuisen described it as the most significant budget in the country's recent history.

Hill-Lewis said negligible economic growth and high levels of debt have obliterated South Africa's ability to save in times of plenty, and to spend in a time of crisis.

"In short, South Africa has lost resilience. Businesses are vulnerable, families are vulnerable, government is vulnerable. Many people have lost their lives and livelihoods, who need not have. There is no doubt that the ANC-led government will table this emergency budget with blood on its hands," he said.

He said, as a result, South Africa urgently needs a resilience budget – one which acknowledges that neither austerity (sharp cuts to basic services) nor a big expansion in spending is now possible.

According to Hill-Lewis, the only available option is a careful deployment of debt to fund the crisis response, in addition to economic reforms aimed at spurring growth and a clear path to debt stability.

The DA called for the following:

  • Cutting the public sector wage bill;
  • Selling or shutting down state-owned enterprises that cannot remain viable without state bailouts, adding that it would be "wrong" to prioritise bailouts of ailing state-owned airline SAA over the Covid-19 response;
  • An end to state-owned power utility Eskom's monopoly and opening the electricity market to competition;
  • A rejection of expropriation without compensation, National Health Insurance, prescribed assets and nationalisation of the South African Reserve Bank.

The party further proposes three principles to guide spending priorities, namely: spending must be aligned to interventions that have the most significant multiplier effects; it must contribute to reducing high levels of poverty; and spending that improves government efficiency must be prioritised.

Mboweni has in recent weeks taken to social media to express his own concerns about the upcoming budget. He has been vocal about his stance against government giving bailouts to failing state-owned entities, despite the fact that the ANC and President Cyril Ramaphosa have expressed that government should not give up on these struggling parastatals.

He has also shared a photo of himself and captioned it: "...if loneliness was a person, THIS!" Fin24 previously reported.

Mboweni's tabling of the Adjustments Appropriations Bill – or adjustment budget – is scheduled for 15:00 on Wednesday, in a virtual sitting of the National Assembly.

Parliament expedited processing the Appropriations Bill, which was passed in the National Council of Provinces on Friday. Mboweni will now table the supplementary budget to fund the government's response to the pandemic. 

ZAR/USD
17.63
(-0.14)
ZAR/GBP
23.01
(-0.05)
ZAR/EUR
20.78
(-0.04)
ZAR/AUD
12.62
(-0.03)
ZAR/JPY
0.17
(-0.02)
Gold
2034.21
(+0.05)
Silver
28.28
(+0.09)
Platinum
961.50
(+0.38)
Brent Crude
44.55
(-1.53)
Palladium
2166.01
(+0.63)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 929 votes
It depends on how the funds are used.
74% - 6241 votes
No. We should have gotten the loan elsewhere.
15% - 1284 votes
Vote