ANC Caucus welcomes the 2021 Medium Term Budget Policy Statement (MTBPS)
12 November 2021
The African National Congress (ANC) Parliamentary Caucus welcomes the 2021 Medium Term Budget Policy Statement (MTBPS) delivered by the Minister of Finance, Comrade Enoch Godongwana, in the National Assembly yesterday, 11 November 2021.
The Minister and the National Treasury team were faced with a task of allocating funds to achieve government’s strategic objectives while facing enormous economic headwinds.
The unemployment rate rose to an unprecedented 34.4 percent in the second quarter from 32.6 percent in the first quarter of 2021.The inability of millions of South Africans to find work adds to the social instability that has been experienced in many communities.
The projected economic recovery by 5.1 percent supported by global demand, following the record slump of 6.4 in 2020 induced by the Covid-19 pandemic, gives hope that the economy is being restored to better health. However, the ANC Caucus is concerned about the projected average growth of 1.7 percent over the next three years. Given the enormous challenges our country faces, this level of economic growth falls far short of what is needed.
The favourable tax revenues owing to the performance of the commodities sector, and the rebasing of the South African economy, have provided government with improved fiscal space to extend social spending while maintaining the budget deficit at sustainable levels.
The ANC shares the concern of the Minister regarding the high debt-servicing costs and the deterioration of revenues compounded by the coronavirus pandemic. We support the focus on reducing government debt servicing costs, which are likely to outpace spending on health, social development and peace and stability in the medium term. We therefore call on all the three spheres of government and State-owned Enterprises to wage a relentless campaign against the mismanagement of public funds and corruption.
This year’s MTBPS was delivered amidst the resurgence of the coronavirus pandemic in Europe and other parts of the world. This resurgence will disrupt global supply chains and restrict international travel; thus placing severe constraints on the recovery of key job-creating sectors such as trade and tourism.
The ANC Caucus salutes the efforts led by the President to provide means to fight the pandemic such as mass vaccination in order to reach population immunity. We call on South Africans who are not yet vaccinated to take advantage of the widespread availability of vaccines, while still observing the Covid-19 control measures recommended by scientists.
The ANC Caucus welcomes the focus in the statement on the reconstruction and recovery plan and government’s unwavering commitment to drive structural reforms in the economy to accelerate and sustain growth in the long term.
The progress that has been made to increase the generation of electricity by various players including the private power generators is commendable. We are also pleased that the inefficiencies in our ports and logistics sectors are being addressed. All these, together with the delayed release of spectrum, have made South Africa a high cost economy and limited our economic growth and job-creation potential.
The ANC Caucus welcomes the announcement on the additional 55 new infrastructure projects valued at over R595 billion. These projects are critical for achieving the goal of reigniting growth and creating jobs.
The commitment to allocate R100 billion over ten years to the Infrastructure Fund must be translated into reality. The private sector, which stands to benefit from the efficiencies that will be brought about by investments in infrastructure, must also come to the party and close the funding gap in partnership with government, Development Finance Institutions and SOEs.
The ANC welcomes the continued increases in government spending from R2.1 trillion to R2.24 trillion over the next three years. We hope that this increased expenditure will lead to overall improved wellbeing of society and higher levels of growth of our economy.
The ANC Caucus notes government’s ongoing commitments to support fee-free higher education and training as well as the extension of the social distress relief grant up to March 2022. We call on government to move forward with the implementation of the comprehensive social security policy.
We concluded the local government elections a week ago. Our people have expressed their aspirations and their frustrations. The ANC has heard them. We are thus encouraged by the commitment in the MTBPS to strengthen the local sphere of government through the Division of Revenue.
The ANC Caucus agrees with the Minister of Finance that the majority of our people still trust the African National Congress to turn around the economy and to govern with integrity in line with the values of the Constitution.
Parliament will process the MTBPS and the bills presented by the Minister today in an open and transparent manner in the relevant committees, and taking into consideration public submissions. We will also maintain oversight of the implementation of the commitments made by government.
Issued by the Office of the ANC Chief Whip, Comrade Pemmy Majodina