Finance Minister Enoch Godongwana has hinted that spending priorities could shift from a response to Covid-19 to tackling rampant unemployment through job creation initiatives for young people, as mechanisms aimed at mitigating the impact of lockdowns on livelihoods begin to wind down.
"An amount of R18.4 billion is allocated in 2022/23 and 2023/24 to support youth employment and the creation of short-term jobs under the presidential employment initiative," the budget review said.
In addition, most non-interest spending would be directed towards the social wage, which includes "health, education, housing, social protection, employment programmes, and local amenities".
Godongwana tabled his first budget speech during a joint sitting of Parliament on Wednesday afternoon, two weeks after President Cyril Ramaphosa said in his State of the Nation Address that government was considering ending the National State of Disaster.
Government spending included considerable relief to those impacted by both the pandemic and the July unrest last year. According to the budget review, UIF TERS had paid out R61.5 billion in relief to about five million workers affected by Covid-19 and R10.1 million to 2 700 affected workers affected by the July unrest by the end of January.
But these payouts are set to decrease. At the same time, tax revenue for 2021/22 is estimated to come in at R1.55 trillion, a full R62 billion higher than estimates four months ago.
"Projected benefit payments are set to decrease from R40.7 billion in 2021/22 to R23.3 billion in 2024/25 as temporary Covid-19 relief winds down.
"The fund will incur an average annual cash deficit of R8.6 billion over the medium term due to higher benefit payments arising from the Unemployment Insurance Amendment Act of 2017, which came into effect in 2019/20, exceeding the contributions received," the budget review said.
The budget review said net asset value for the UIF was expected to grow to R132.9 billion in 2024/25 due to an increase in technical reserves to cover outstanding or potential future payments.
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