WATCH |Live updates: Finance Minister Enoch Godongwana delivers #BudgetSpeech2023
| Author | Staff Reporter |
| Published date | 22 February 2023 |
| Publication title | SowetanLIVE (Johannesburg, South Africa) |
Local government allocations will increase by a total of R14.3 billion, made up of R8.1 billion in the local government equitable share and R6.2 billion in direct conditional grants. This takes the total direct allocation to R522 billion over the same period. These allocations alleviate some of the financial pressures, particularly in health, education, and free basic services where the costs of providing services are rising.
14:55
South Africa has been a voluntary member of the Financial Action Task Force (FATF) since 2003, which sets global standards to combat money laundering and the financing of terrorism across national borders.
In 2021, FATF published its mutual evaluation report highlighting vulnerabilities in the country's antimoney laundering system. We have since made substantial progress to address these weaknesses.
Two laws have been enacted to address the technical deficiencies in the legislative framework, namely the General Laws Amendment Act of 2022, and the Protection of Constitutional Democracy Against Terrorist and Related Activities Amendment Act. The laws address 15 of the 20 legislative deficiencies identified by FATF. The remaining 5 deficiencies will be addressed through regulations and practices that do not require legislation.
We recognise the need to be more effective in implementing our laws, particularly in fighting organised and sophisticated crimes. Addressing the FATF issues is part of the broader fight against corruption, crime, state capture and the deliberate weakening of the institutions of law and order in our country.
The FATF Plenary will make its decision later this week on whether or not to put South Africa under increased monitoring, otherwise known as grey listing. We should be prepared for that possibility.
14:54
In relation to the recent floods and the national disaster declared in various provinces, R695 million is available in this financial year for immediate relief. A further R1 billion will be available next year.
The emergency response also requires provinces and municipalities to reprioritise existing allocations to cater for the immediate needs of affected communities, such as temporary shelter and social assistance. The contingency reserve will also be used to fund emergency responses, including as undertaken by the Defence Force. As it pertains to Recovery and Repair, which relates to longer term rehabilitation and rebuilding of damaged infrastructure, assessments of the extent of the damage and costs need to be determined. Funding for this component will be through the normal budget process.
14:53
This Budget provides for the carrythrough costs of the 2022/23 wage increase. In addition, the Budget includes pay progression, a housing allowance, and other benefits for civil servants. The Budget also provides additional funding for safety and security, education and health.
In health, the funds are to hire new staff, address shortfalls in compensation budgets, and retain additional health workers appointed during the pandemic, as well as to clear the backlog in health services. As for the wage negotiations that just commenced, the budget does not preempt the outcomes. Nevertheless, this and future wage negotiations must strike a balance between fair pay, fiscal sustainability, and the need for additional staff in frontline services.
An unbudgeted wage settlement will require very significant tradeoffs in government spending because the wage bill is a significant cost driver. It will mean that funds must be clawed back in other ways. Mainly, this will mean restricting the ability of departments and entities to fill noncritical posts.
It will also mean achieving costsavings from major rationalisation of state entities and programmes. As indicated by the President in the SONA, the National Treasury has already identified where large savings can be achieved. In this regard, during the upcoming financial year, the National Treasury will work with the Presidency on concrete proposals to achieve savings by rationalising or closing public entities. Recommendations will be made to the President and Cabinet and should form part of the next budget.
14:52
Over the mediumterm, more than 60 per cent of noninterest expenditure goes to the social wage, while spending on buildings and other fixed structures – such as roads and dams – will increase from R62 billion in current year to R104.2 billion in 2025/26. We are increasing allocations to key frontline departments above existing baselines, moving toward a change in the composition of spending from consumption to investment, maintaining a large social security safety net, while striving for sustainable levels of debt.
This is not an austerity budget. It is a budget that makes tough tradeoffs in the interests of the country's short and long term prosperity. The 2023 Budget allocates additional funding totalling R227 billion over the medium term. There are several priorities that will be funded through this additional money.
R66 billion is allocated to Social Development over the medium term, with R36 billion to fund the extension of the COVID19 social relief of distress grant until 31 March 2024. R30 billion will be used for inflationlinked increases for other social grants. As a result:
The old age and disability...
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