By Lehlohonolo Lehana.
Finance minister Enoch Godongwana did not have any major surprises in his 2023 Budget speech which was delivered in Cape Town on Wednesday.
As expected, he announced government’s initial Eskom debt relief plan (R254 billion) and increased tax incentives for rooftop solar PV in the face of SA’s worsening power crisis.
Godongwana mentioned in the 2022 mid-term budget in October that the Eskom debt relief bill would be tabled in February’s main budget, while President Cyril Ramaphosa announced in his recent State of the Nation Address that solar PV incentives or tax support is on the cards to help mitigate the impact of load shedding on households and the economy.
The Democratic Alliance (DA) said there was nothing “bold” about his speech, which instead, added to the country’s debt problem and offered no solution for overly taxed and vulnerable South Africans.
In a statement, its spokesperson on finance, Dion George, said Godongwana missed an opportunity to encourage economic growth, attract foreign capital, and strengthen domestic savings by increasing tax-free savings limits.
He called the minister’s plans to “bail out” Eskom, the SA Post Office, SAA, and Land Bank irresponsible and a misallocation of funds.
“The DA firmly opposes these bailouts, as they have failed to stimulate corporate revitalisation and growth necessary to address the underperformance and financial struggles of these entities,” said George.
He added Godongwana did not mention the new electricity minister and offered no solid plan to resolve the current energy crisis.
“It also lacks any coherent plan to restructure Eskom and address the energy crisis. This move will only increase interest payments even further, without any incentive for Eskom to become more efficient,” George said.
The party, however, welcomed the incentives to provide solar panels through tax rebates and efforts to boost the National Prosecuting Authority (NPA), police, and Special Investigating Unit (SIU).
ActionSA’s Athol Trollip also welcomed the minister’s effort to provide solar panels through tax rebates and introduce a tax relief plan for food producers.
Trollip welcomed the government’s plan to take over Eskom’s R254-billion debt.
He said the ANC was responsible for the “tough choices” Godongwana made due to corruption and mismanagement.
Trollip added fundamental reforms and tackling crime and corruption were necessary to “ignite long-term economic growth”.
“It is only through fundamental reforms that long-term economic growth will be ignited that will improve the lives of our people, and the ANC has consistently shown that it is too preoccupied with internal power struggles than making the required decisions.”
He said the recent comments made by outgoing Eskom CEO Andre de Ruyter about the Just Energy Transition money proved corruption needed to be tackled to ensure public entities benefitted from additional funding.
The party expressed concern over the government’s commitment and the “insufficient allocation of resources” in crime and corruption-fighting institutions such as the NPA and SIU, which are at risk of being grey-listed by the Financial Action Task Force.