- National Treasury said the economy is expected to contract by 7.8% in 2020, recovering to read GDP growth of 3.3% in 2021.
- The medium-term budget policy statement proposed a provisional allocation of R19.6 billion for job creation and protection.
- The statement said R1 billion was allocated for food relief and social grant-based relief amounts to R48 billion in 2020-21.
Minister of Finance Tito Mboweni said government would continue funding various Covid-19 relief programs to continue into January of next and some would even continue into the middle of the year 2021.
Mboweni tabled the medium-term budget policy statement in Parliament on Wednesday. It was the first medium-term budget policy statement since the advent of the pandemic.
National Treasury said in an explanatory document that the economy is expected to contract by 7.8% in 2020, recovering to read GDP growth of 3.3% in 2021 and averaging 2.1% over the medium-term period.
"The consolidated deficit narrows from 15.7% of GDP in 2020-21 to 7.3% by 2023-24. Gross national debt is projected to stabilise at 95.3% of GDP by 2025-26," the medium-term budget policy statement said.
During the tabling of the medium term budget policy statement, Mboweni said during the national lockdown, cash grants were paid to over 22 million people, nearly half of the population of the country.
"The Cabinet has decided to extend the Social Relief of Distress grant to the end of January 2021. Because this grant is so effective in reaching the unemployed, we propose to redirect R6.8 billion from the public employment programme allocation," said Mboweni.
The medium-term budget policy statement said of the provisional allocation of R19.6 billion set aside in the June special adjustments budget for job creation and protection, R6.8 billion went to the Department of Social Development to fund special Covid-19 social relief grant until January 2021.
An amount of R12.6 billion is allocated for presidential employment interventions to address unemployment, especially as it affects youth, the medium-term budget policy statement said.
"To continue mitigating food insecurity and poverty, an additional R6.8 billion is allocated to the Department of Social Development to extend the special Covid-19 social relief of distress grant for three months until 31 January 2021," the statement said.
The medium-term budget policy statement said R1 billion was allocated for food relief and short-term social grant-based relief amounts to R48 billion would be allocated in 2020-21.
"During the year, more than 12 million new recipients received income protection. Implementation of the special grant shows the need for measures to cross-check applicants across databases, such as common social security registries," the statement said.
The statement said Government and the tourism sector will collaborate to maintain tourism assets. Government will extend the short-term tourism relief fund to mid-2021 to assist eligible small, medium and micro-enterprises with working capital.
"Over the medium term, government has set aside about R540 million for a tourism equity fund to support black-owned and commercially viable enterprises to acquire shares in tourism enterprises," the statement said.