On November 11, finance minister Enoch Godongwana delivered his maiden mid-term budget policy statement. This statement was delivered amidst deepening fiscal insecurity and austerity measures.
The statement said the medium-term economic outlook has improved somewhat since the February 2021 forecast, largely driven by supportive global conditions. “However, momentum is slowing as a result of domestic and global factors – including continued structural constraints and the scarring impact of the pandemic on jobs and investment – that will adversely affect GDP growth.”
Protests against austerity
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Even before the minister delivered his speech, there were various protest actions that took place across the country. The Cry of the Xcluded delivered a memorandum to parliament. The protests across the country took place under the theme of “pots and pans”. In their memorandum, the Cry of the Xcluded said: “After elections our pots remain empty and we are still hungry. Promises of jobs, houses, services and addressing climate change cannot be kept if we don’t spend the money needed to provide it.”
Part of the memorandum called on the minister to institute a basic income grant of R1500 that meets the immediate living needs of the unemployed.
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They also demanded that the government oversee a just transition from the current economy to a low-carbon economy based on 100% renewable energy. Lastly, the Cry of the Xcluded said: “We built South Africa and South Africa belongs to us, now is the time to make SA #WorkForUs.”
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Grants and welfare
In his statement, Godongwana said: “The easing of lockdown restrictions and the reinstatement of the special COVID-19 social relief of distress grant until March 2022 will support spending for lower-income households in particular through the rest of 2021.” The fiscal relief package includes reintroduction of the temporary R350 special COVID-19 social relief of distress grant until the end of 2021/22. There will be a broadened eligibility to include caregivers who receive the child support grant.
With regards to the basic income grant, the minister said any proposals to expand this system should meet the test of sustainability and effectiveness. It needs to be fully and appropriately financed to ensure that the fiscal balance does not deteriorate. Secondly, the minister said it needs to be evaluated against pre-existing priorities of the government that remain unfunded, including in basic services, education and healthcare.
Higher Education
With regards to higher education, the statement said growth in subsidies and grants have slowed for universities, technical and vocational education and training colleges, and the National Student Financial Aid Scheme. The ministerial task team is conceptualising a new student financial funding model for the higher education and training system. The team will table a report to cabinet in November 2021.
