Minister of Finance Tito Mboweni said on Friday that he would table a revised budget to Parliament which would accommodate government’s R800 billion response to the Covid-19 coronavirus pandemic.
“I will be shortly tabling a revised budget bill before Parliament to deal with all of these measures,” Mboweni said at a press briefing.
Earlier in the week, President Cyril Ramaphosa announced the R500 billion coronavirus relief package, which included stimulus funds, allocations for salary cover and tax incentives for businesses affected by Covid-19 and the lockdown.
Mboweni said the relief package, combined with monetary policy measures from the South African Reserve Bank such as the 200 basis point cut in interest rates in less than a month, could unlock as much as R800 billion into the economy.
Without detailing the strategy in depth, Mboweni said the national budget that he tabled in in February would undergo budget reallocation and reprioritisation to ensure that funds are redirected from non-essential state functions to the government’s interventions to the coronavirus.
“It is very clear that, for the next while, there will not be much tourism that will be happening for a while. So, it would not make sense to allocate funds towards tourism during a period when tourism is not taking place.
“We are going all out to remove from the budget all items which can be postponed. All programmes which can be postponed will be postponed, and we are redirecting that money to these initiatives,” said Mboweni.
When reporters asked Mboweni for clarity regarding accessing loans from the international community, such as the International Monetary Fund, Mboweni said South Africa was well within its rights to access emergency funds from lenders to fight the coronavirus.
‘Making a mountain out of molehill’
“I think we are trying to make a mountain out of a molehill. The fact of the matter is we are members of the IMF and the World Bank. We pay our subscriptions to them and we are entitled to approach these organisations,” he said.
Mboweni said the question of the Reserve Bank printing money and putting it into the system did not immediately arise, as government was preoccupied with introducing other measures.
Economist Thabi Leoka said the minister’s address was thin on detail and that she was hoping that Mboweni would comprehensively unpack funding reprioritisation and the targeting of financial measures.
“He didn’t add much to what the president said. I expected more granularity regarding allocations and the R500 billion. I expected him to mention whether this was sufficient or if there will be more needed,” Leoka said.
Leoka said redirecting funds from non-urgent state functions was a good initiative, as there were government programmes which were unnecessary and not yielding the expected results.