Budget supports growth, development goals – Ramaphosa

Henry

Despite sharp criticism to the contrary, pres. Cyril Ramaphosa insists that the government’s budget for the new year promotes economic growth and supports the government’s development goals.

“Over the past five years, we have taken several steps to get our economy back on track,” Ramaphosa said in his weekly newsletter on Monday.

“We have introduced far-reaching reforms in the energy, logistics, water and telecommunications sectors to tackle binding growth constraints. We created a stable macroeconomic environment to encourage investment and extended social assistance to create jobs and provide an income to the unemployed.”

Finance Minister Enoch Godongwana tabled the 2024 budget last week.

This has triggered criticism from various economists, political parties and other role players, who argue among other things that the ANC government will “never change” and that South Africans themselves will have to work hard to bring about change.

Other critics believe the budget is a mere lifeline for the ANC, while some have described it as an “election budget” with the taxpayer still getting the short end of the stick. Agricultural organizations are also dissatisfied with the meager support this extremely important sector receives in the budget.

However, according to Ramaphosa, the 2024 budget will support economic growth in at least three ways.

The first is the reduction of government debt.

“Over the past fifteen years, our debt burden has grown to a point where we spend more on interest payments than on education or health care services.

“By reducing debt, we will create more room for spending on the things that matter: building our infrastructure, improving schools and hospitals, and securing our communities.”

The president further says that the less the state borrows, the more can be invested in the economy.

Secondly, the budget protects essential services and social spending, which ensures that the government can fulfill its core responsibilities towards South Africans, according to Ramaphosa.

“We have allocated additional money for service delivery, which will help pay the salaries of police officers, teachers, nurses and doctors.

“This year alone we will spend more than R480 billion on education, R272 billion on health and R265 billion on other services such as water, housing and public transport.

“A further R7.4 billion will go towards the presidential employment stimulus programme, which has already created more than 1.7 million job opportunities and an income for people over the past three years, and which ensures that key programs such as (the appointment of) school assistants continue.”

Ramaphosa says social allowance is also being increased to help the poorest households face the rising cost of living.

According to the president, the third important aspect of the budget includes new measures to promote economic growth and create jobs, while rebuilding infrastructure.

“A new grant of R2 billion has been allocated to finance the introduction of smart meters in municipalities. This will help modernize our power system and reduce load shedding. A generous incentive will be introduced to support the manufacture of electric vehicles from 2026, as part of our commitment to establish South Africa as a leading player in the transition to a green economy.”

Ramaphosa says innovative new financing tools for infrastructure projects have also been introduced, and that the national treasury has published revised regulations to make partnerships between the public and private sectors easier.

“These measures will enable much greater investment in infrastructure.

“Our economy has been reeling under low growth and rising debt for the past decade, which was exacerbated during the era of nationalization. The latter also completely broke trust.

“This administration has worked hard to change that and establish a foundation for better growth and more jobs. The 2024 budget shows that we are moving in the right direction. We are determined to continue on this path, implementing economic reforms, fixing our public finances and ensuring basic services for the poor. By working together we will ensure better years ahead.”