The Minister of Finance warned in recent months that government will need to tighten its belts and implement budget cuts amidst the low revenue collection. As South Africans we know that such cuts are necessary—the Treasury on Monday reported that the budget deficit soared to R14.6bn in September from R3.3bn a year earlier, taking the gap in the first six months of the fiscal year to R253bn – a year-on-year increase of 54%.
Thus apart from announcing certain austerity measures, Minister Godongwana also broadcasted that:
- Spending has been revised down by R21 billion for the current financial year (and further reductions of R64 billion in 2024/25 and R69 billion in 2025/26 are proposed);
- The Social Relief of Distress (SRD) grant will be extended for another year;
- South Africa will need to borrow an average of R553 billion per year over the medium term; and
- No bailout was announced for Transnet or for other larger state-owned enterprises such as Eskom, Denel or SAA.