South Africa to get new coronavirus budget in June
The National Treasury will table a new special budget on 24 June to formalise plans around a stimulus package to help the country fight the coronavirus.
On 21 April, President Cyril Ramaphosa announced a R500 billion fiscal support package that includes spending towards Covid-19 priorities.
Part of the funding sources for this package is a R130 billion baseline reprioritisation in the 2020/21 financial year.
The table below shows the announced economic measures.
“The special adjustment budget seeks to modify the 2020/21 budget to utilise current baseline allocations to provide for the rapidly changing economic conditions and enable spending on the Covid-19 response,” Treasury said.
“A revised fiscal framework will also be presented, to account for substantial revenue losses emanating from the economic shock of the pandemic and subsequent lockdown.”
All other adjustments not included in this special adjustment budget will be tabled in the October Adjustment Budget, it said.
Treasury recently stated that as many as 7 million South Africans could become unemployed if large chunks of the economy remained closed for the remainder of the year.
It said that around 3 million jobs are at risk even if the pandemic is contained quickly, while a slow recovery could see 5 million job losses. A worst-case scenario would push the unemployment rate to over 50%, from its current rate of just under 30%.
Dondo Mogajane, the National Treasury’s director-general, warned last week that the country’s unemployment rate could reach as high as 40%.
Speaking to 702, he said that the economy could contract between 7% and 12% as a result of the impact of the coronavirus.
He said that unemployment could reach between 30% and 40% – “if things go the way they are”. He said that the tourism industry is on its knees, with travel agencies closing down.
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