Finance minister Tito Mboweni will deliver his special ’emergency’ budget on Wednesday (24 June) at 15h00, where he will table a new financial framework to respond to the coronavirus pandemic which has wreaked havoc on the local economy.
The supplementary budget was necessitated by president Cyril Ramaphosa’s announcement that government would spend R500 billion to support the flagging economy.
According to analysts, the finance minister has his work cut out for him, with very little wiggle room to free up money in the current budget to provide this support.
Included in the R500 billion plan is R130 billion in reprioritised spend from the budget tabled in February. While reports have speculated that Mboweni will look to cutting the government wage bill for additional support, analysts have said that this is unlikely to sit well with public service unions, and thus may be nixed.
Other areas the minister can look at for revenue are also difficult to navigate – such as new or reworked taxes. While taxes are traditionally seen as an easy source of money, with the country’s tax base stretched thin and suffering the effects of the nationwide lockdown, Mboweni would be hard-pressed to find support here.
Some things we are likely to see from the speech today include:
- A broad analysis of the expected impact of Covid-19 and the associated containment measures on the labour force, business environment, broader economy and the poor and vulnerable parts of society;
- Growth revisions and more detail on the impact per sector as well as an updated impact on jobs;
- An urgency to retrace previous sovereign rating downgrades;
- A revised revenue shortfall;
- Emphasis on the need for a social compact;
- An update of the social transfers and unemployment insurance fund pay-outs granted in this period;
- Potentially an update on the emergency financing available to SA from the International Monetary Fund (IMF).
You will be able to watch the speech live from several sources, including in the embedded video below.
For direct feeds, you can watch speech online at:
The speech can also be watched live on DStv channel 408 and the SABC news channels.