FINANCE Minister Enoch Godongwana's Medium-Term Budget Policy Statement (MTBPS) rankled a joint meeting of Parliamentary committees who took broadsides at the possibility of VAT increases, fuel levy cuts, National Health Insurance, balancing the R56 billion fiscus deficit, Eskom's increasing ineptness and a host of issues they felt were inadequately considered by National Treasury.
The minister's continued reference to “the most difficult MTBPS to date” could not assuage the perception of "kick for touch" perception by Parliamentarians who felt Treasury had no concrete plans for closing down the fiscal deficit.
EFF MP Mzwanele Manyi said: "The department’s reaction to the problems are very deflating. They don't help the psyche of the nation. The Minister does not say how how government is going to help the private sector to do what they need to do to contribute.“
Godongwana and the newly appointed director-general of the department, Duncan Pieterse, were at pains to point out the urgent interventions necessary for both power utility Eskom’s and logistics authority Transnet National Ports Authority’s efficiency to regain ground lost since about 2008.
That and the fact that the government is battling with a R1.2 trillion debt service quandary prompted enquiries on whether the government intended to increase VAT, increase the fuel levy as well as pay to bolster efforts at making up for the deficit.
Questions arose about South Africa's financially beneficial liaison in the BRICS coalition when all Godongwana had to point to were appeals for concessional funding arrangements for the World Bank and the International Monetary Fund (IMF).
Godongwana said there not as yet been finer discussions on Transnet's proposed R50bn bailout over the next two years nor Eskom's non-interest R254bn bailout package becoming interest bearing while the country faced a spiralling debt burden amounting to more than R1.2 trillion.
As questions flooded in, Godongwana said: "With the request for an R50bn bailout by Transnet, issues about Eskom's discretion on VAT of R283bn to date and then the R254 debt bailout package all amount to more than half a trillion rand which do not actually address power to the grid.
“We have seen the template is not successful. We have to look at ways around that but how does NHI come into the equation, the health sector has made huge savings on HIV medication and we have to make strides from that.”
Pieterse said the government was hard pressed to raise R15bn in the next financial year.
Zero rating of some products, including poultry cuts meant for the lower economic market, also left the state in an income quandary.
BUSINESS REPORT