Finance Minister Tito Mboweni’s budget speech on Wednesday will dominate headlines this week.
The Minister has a tough job to do as he seeks to address significant social challenges, satisfy public pressure and reassure investors and ratings agencies.
The Budget is an annual plan for what government wants to achieve and how it will spend money to achieve those goals. It is the most important economic instrument of the government. It is used to make sure that the state has the resources it needs to do its work. Since there is a limit to the resources, there is an increased need for proper budgeting to allocate scarce resources to various governmental activities. (source: parliament.gov.za)
COVID-19; low economic growth; high unemployment; wastage and corruption; mismanagement at local, provincial and national government; revenue shortfalls and underperformance of State-Owned Enterprises (SOEs) are some of the major challenges facing the country.
According to analysts, the budget is expected to focus heavily on government’s plans to grow the economy, vaccine rollout costs, transfers to SOEs and plans to fix them.
In addition, there will be a lot of attention on the spending allocated to government’s social and infrastructure programmes and plans to reduce the budget deficit and public sector wage bill.
The 2021 State of the Nation Address detailed the progress made with regards to the Economic Reconstruction and Recovery Plan. The President asserted that the country will not achieve higher rates of growth and employment if the government does not implement structural economic reforms.
The World Bank and IMF forecast that the economy will grow by 3.3% and 2.8% respectively in 2021. In his https://pmg.org.za/briefing/31329/, the Minister predicted 3.3% growth. This follows an estimated 7.3% contraction in 2020.
The reality is that public finances are constrained, limiting the ability of government to expand its investment in economic and social development. Government has to do more with less and needs to be efficient in the use of financial resources.
Exercising budgetary and fiscal oversight is one of Parliament’s important tasks. The budget presented by the Minister is a proposal that has to be scrutinised and approved by Parliament.
The budget will be accompanied with the tabling of the Appropriation Bill and Division of Revenue Bill. The budget bills will be discussed and processed in the relevant parliamentary committee.
In addition, the budgets of specific national departments are discussed in the committees which oversee those departments. As part of their oversight, committees can hold departments accountable by comparing the budget plans that Parliament has approved with what has actually been done.
It is also a pandemic-focused week, with both houses organising events on this topic. In the National Assembly, an urgent debate has been scheduled on Tuesday on the rollout of a Covid-19 vaccination plan for South Africa. The debate is sponsored by the Chief Whip of the Opposition. On Thursday, the NCOP has arranged a Ministerial Briefing Session on the Vaccine Rollout Strategy and Vaccine Acquisition Plan. Plus there are a number of virus-related committee