E-tolls may be dead, but Gauteng drivers will still pay for freeway - Godongwana

• Finance Minister Enoch Godongwana said the government was stuck between "a rock and a hard place" when he tabled the medium-term budget.
• Godongwana said struggling parastatals had already received billions from the fiscus in previous years and only the most urgent entities could be helped this time.
• While the Gauteng provincial government would have the prerogative to scrap e-tolls, the provincial government would also have to figure out how to pay for the maintenance and management of the roads. 
• For more financial news, go to the News24 Business front page.

Finance Minister Enoch Godongwana said he tabled his 2022 Medium-term Budget Policy Statement (MTBPS) at a time when the government was stuck between "a rock and a hard place", giving relief in only the most urgent circumstances with strict conditions.

Godongwana's MTBPS introduced R23.7 billion for Sanral and a commitment for the national and Gauteng provincial governments to take on the road agency's debt. The management of the electronic tolling system of the Gauteng Freeway Improvement Project (GFIP) will also shift to the Gauteng government.

The Post Office, SABC, and SAA received no new allocations, but Denel, and Transnet got debt and capacity-related assistance from the MTBPS.

The MTBPS also penciled in an average growth rate of 3.1% to the public service wage bill in the medium term, angering unions in ongoing wage talks.

Godongwana told Parliament's Standing Committee on Finance, the Standing Committee on Appropriations, the Select Committee on Finance, and the Select Committee on Appropriations on Thursday that his MTBPS hoped to make room for substantial infrastructure investments, the social wage, and improvements to basic services, but difficult trade-offs were on the table.

READ | ANALYSIS | Godongwana does the seemingly impossible. Now SOEs must do the same

Gauteng's bill to pay

Godongwana told Parliament that while the Gauteng provincial government would have the prerogative to scrap e-tolls, the provincial government would also have to figure out how to pay for the maintenance and management of the roads in stages 2 and 3 of the GFIP.

"The issue of whether motorists are going to pay in Gauteng … yes of course they have (to). Now the question is whether they are going to pay it via the equitable share in Gauteng or they are going to pay through a toll or (are) they going to pay via any other tax that the provincial government is empowered to tax. Gauteng people will have to pay for the maintenance of the roads. The question is going to be what those methods should be," said Godongwana.

A rock and a hard place

Godongwana slammed suggestions that his medium-term budget left the national carrier out in the cold, saying SAA to date has taken R46 billion from the fiscus and has requested another R3 billion, which would have taken this figure to R49 billion.

"We are in a choice between a rock and a hard place because if we don't intervene - and this is why people say Eskom is too big to fail - Eskom may default and, in doing so, drag the sovereign with them," Godongwana said.

Godongwana said state-owned entities that are operationally dysfunctional also report to other government departments. He said next week the National Treasury would flag these entities every week at a national government level.

Godongwana said the government was still committed to negotiating in good faith with unions on the public service wage bill, although he had to use a sustainable figure to plan the growth of the public service wage bill in the medium term.

"After a long period, we reached an agreement with the unions through a facilitated process which we agreed to table at the bargaining council. When this matter was tabled at the bargaining council, all constituencies, including ourselves, had to go and sell it back to our constituents.

"It has not been a good sell for us, but clearly the provinces were hitting hard on us because they have a huge salary bill. The unions came back and said their members rejected a deal that was tentatively agreed to by them. In those circumstances we have got no options but to implement," he said.

READ | As govt looks set to force through 3% hike, Godongwana hints at wage talk reform

Need to recover

Acting director-general at National Treasury Ismail Momoniat said the good message of the MTBPS was that South Africa was restoring its health of public finances at a time when globally there was a real slowdown taking place.

"In this global environment, we probably would have to be more fiscally prudent than we would normally have been. But we have been helped by the fact that we have had higher than anticipated revenues which have reduced the borrowing requirement and allowed us to prioritise key areas and spending priorities, frontline services, health, education and policing, and crime, and put more money into infrastructure so that the budget has more of a growth orientation," said Momoniat.

Momoniat said the global economy was showing bleak projections, from the UK's unfunded budget earlier this month, to China's Zero-Covid policy, to the Russian invasion of Ukraine. 

National Treasury deputy director in the budget office Edgar Sishi said the National Treasury revised GDP forecast downward towards 1.9% due to headwinds such as the Russian invasion, KZN flooding, continued load shedding, and the recent strike at Transnet.

"What we need to do to counter both these effects as well as the economic challenges that South Africa faces, is to accelerate the pace of economic reforms and structural reforms. And this remains very crucial to weather the storm and to deal with the fact that some of these things have been here for a number of years," said Sishi.

Sishi said South Africa needed a clear and stable macroeconomic framework. He said since the February budget, the government had made progress on the focus areas of Operation Vulindlela, including energy, IT, and digitisation of the South African visa system.