Wednesday’s Medium-Term Budget Policy Statement (MTBPS) given by Finance Minister Enoch Godongwana was met with collective disapproval from some political parties, who have bemoaned the potential effects of slashed government spending on consumers amid a high cost of living crisis coupled with crime, unemployment and energy insecurity. 

In his speech, Godongwana highlighted National Treasury’s agenda of stabilising public finances by prioritising reforms aimed at enhancing the growth of the gross domestic product over the next three years. 

The reconfiguration of the size and structure of the State, aimed at delivering quality public services, was put forward along with a focus on incentivising large infrastructure projects.

The Democratic Alliance (DA) noted that the MTBPS was indicative of the ruling party’s inability to accelerate economic growth but commended the plans to accelerate private-public partnerships to rebuild the country’s collapsing infrastructure.

Further, the party believes the budget statement could have better considered the plight of consumers through the reduction of taxes and fuel levies.  

“The MTBPS was confirmation that government simply does not care about the plight of battling South African households who are unable to put enough food on their tables. There was no plan on the so-called food security plan of action to protect consumers from the burden of skyrocketing food prices,” said DA Finance Shadow Minister Dr Dion George.

Noting the country’s worsening unemployment crisis, the Inkatha Freedom Party directed its criticism at the failure of Godongwana to address the imperative need to create jobs.

The Economic Freedom Fighters (EFF) highlighted the broader social implications of the proposed spending cuts. 

“The EFF rejects the proposed cuts of direct provincial conditional grants of R6.2-billion, which include the conditional grant of poverty relief and infrastructure development, early childhood development grant, education infrastructure grant, and other grants meant for much-needed social infrastructure,” said party spokesperson Sinawo Tambo. 

It believes National Treasury will be undermining the country’s sovereignty by shifting borrowing from domestic pensions and insurers to institutions such as the International Monetary Fund and the World Bank.

ActionSA bemoaned the lack of positive results attributed to reforms and decried Godongwana’s failure to address the mismanagement of public money, an issue it holds as a key impediment to economic growth.

GOOD, meanwhile, has cautioned National Treasury against an over-reliance on the private sector as it contends that this could deepen inequality and exclusion. 

“South Africa must ensure that its financial and economic policies and plans are coherent, and implemented, or its reliance on the private sector will not deliver the hoped-for goods,” said GOOD secretary-general Brett Herron.

The South African Communist Party lauded the extension of the Social Relief of Distress Grant by another year until March 2025, with R34-billion being allocated to the grant.

Despite the stark opposition to the Budget Statement, the ANC has commended Godongwana’s efforts to stabilise the economy. 

“The erosion of fiscal space occasioned by the current macroeconomic context will require comprehensive and sustained reforms to public finances to ensure public sector solvency, protect investment, safeguard achievements on the social front and broaden tax resources,” said its spokesperson Mahlengi Bhengu-Motsiri.