The long-awaited 2020 Medium Term Budget Policy Statement (MTBPS) speech has finally been delivered by Finance Minister Tito Mboweni and National Treasury.
These are the key budget speech points to note:
1. Treasury plans a five-year fiscal consolidation pathway that will promote economic growth while bringing debt under control. The revised fiscal framework aims to stabilise the ratio of debt-to-GDP at around 95% within the next five years.
2. Gross debt will rise from roughly R4 trillion this year to R5.5 trillion in 2023/24.
3. Treasury proposes spending R6.2 trillion over the 2021 Medium Term Expenditure Framework, of which R1.2 trillion will go to learning and culture, R978 billion to social development and R724 billion to health.
4. The South African economy is forecast to grow by 3.3% in 2021, 1.7% in 2022 and 1.5% in 2023.
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5. Progress is being made in allowing municipalities to buy electricity from different sources. Almost 12,000 MW of new electricity capacity could be provided by independent power producers.
6. An additional R6.7 billion has been committed to the Social Housing Programme aimed at poor, working South Africans.
7. A Student Housing Programme worth an estimated R96 billion is underway. It will service nearly 300,000 students a year when it is finished.
8. Government aims to review Regulation 28 to make it easier for retirement funds to increase investment in infrastructure, but trustees are expected to put the interests of retirement fund members first. A draft gazette will also be released for public comment.
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9. R23bn has been allocated to Eskom.
10. R6.5bn has been allocated to South African Airways (SAA) for settling its debt and interest. In addition, R10.5bn was allocated to SAA to implement its business rescue plan. Apparently, this was mainly funded through reductions to the baselines of national departments and their public entities, and provincial and local government conditional grants.
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- For the full budget speech, click here.
