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National Treasury confirms 21 February as budget day

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National Treasury confirms 21 February as budget day

Finance Minister Enoch Godongwana
Finance Minister Enoch Godongwana

24th January 2024

By: News24Wire

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South Africa’s national budget day has been confirmed for 21 February at 14:00, according a statement by the National Treasury on Wednesday.

Finance Minister Enoch Godongwana will "announce government’s spending, tax and borrowing plans for the next three years" in Parliament, it said. 

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This year’s event will be closely watched, with Godongwana having said during the medium-term budget presentation in November that significant cost-cutting measures will be undertaken within the government and that the fiscus needed to recoup about R15-billion in taxes.

Promises by various finance ministers in the past to curb government’s spending haven’t amounted to much and analysts have questioned whether or not the state has the stomach for austerity measures, especially in an election year.

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The need to raise an extra R15-billion has also been a topic for debate for the past three months, with consumers concerned that the likes of value-added tax could be increased. Economists have, however, said the amount isn’t inordinate and that it could be achieved in a variety or ways, including not adjusting tax brackets so as to allow for bracket creep.

What this means is that if there’s no intervention by the state, inflation and pay increases will push some consumers into higher tax brackets, resulting in larger revenues flowing into the fiscus.

Any statements on load shedding, Eskom’s debt, Transnet and state-owned-enterprise bailouts more broadly will also be scrutinised.

In November, Godongwana said the government had made the mistake of focusing on fixing Eskom when what was required was fixing the electricity supply. Similarly, he said the issue with Transnet is about fixing the "structural aspects" hampering the sector, rather than the company.

When he spoke, no new allocations were made to state-owned and no support for state-owned companies was written into the budget in the next two years to come. 

Social welfare grants and SA’s borrowing plans will also be up for discussion and will form part of the fiscal consolidation that ratings agencies want to see.

With the date planned for a month away, National Treasury said on Monday it’s now in a close-out period until 20 February and that senior officials will be unavailable because of preparations for the budget.

 

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