Budget 2023: ActionSA Welcomes Electricity Announcements, but Concerns Remain Over Fundamental Reforms

Note to editor:  In his absence, ActionSA President, Herman Mashaba, has designated ActionSA Eastern Cape Provincial Chairperson and former Member of Parliament, Athol Trollip, the party’s spokesperson on the 2023 Budget to be delivered by the Finance Minister this afternoon.

ActionSA welcomes Finance Minister, Enoch Godongwana’s commitment during his budget speech to introduce tax credits for private solar panel installation and to take over R254 billion debt from Eskom to stabilise operations at the utility, but we remain concerned that fundamental reforms to ignite long-term economic growth remain missing. 

Without fixing the underlying impediments to economic growth in South Africa such as crime and corruption and the overall decline of our freight transportation infrastructure, the country will be unable to achieve the required economic growth to create jobs and improve the lives of our people.

Minister Godongwana’s announcement around Eskom, private solar panel installation, and fuel tax relief for food producers should assist the country in dealing with the ongoing electricity disaster created by the ANC, but tax relief for private individuals remains too low to make mass solar installation affordable for most South Africans.

The continued bailouts of Eskom can also not continue, and therefore long-term solutions to the utility need to be found such as the long-awaited establishment of an independent transmission company, and the increased participation of private companies and private public partnerships.

Outgoing Eskom CEO, Andre de Ruyter’s recent comments that the $8.5 billion Just Energy Transition money will likely be stolen by the ANC further confirms ActionSA’s suspicions that additional money towards public entities will solve nothing unless corruption is tackled head-on, especially in the governing party, in government and the in state-owned enterprises.

Meanwhile, raising the tax bracket in line with inflation and the announcement of no additional tax initiatives should provide welcome relief to already under-pressure consumers.

The commitment of Minister Godongwana to look at concrete proposals to achieve savings by rationalising or closing public entities should furthermore be welcomed, but ActionSA is concerned that the ANC has made similar commitments in the past with little to no progress due to pressure from its alliance partners and organised labour.

We are furthermore concerned about the insufficient allocation of resources to South Africa’s crime and corruption-fighting institutions. Restoring trust in the government’s ability to effectively spend public money is critical to unlocking economic growth, but the current allocations to institutions like the NPA, FIC and SIU suggest a government that is not serious about addressing corruption.

This is particularly concerning in light of the Minister’s reference to Friday’s likely announcement that South Africa could probably be greylisted by the Financial Action Task Force (FATF).

Minister Godongwana’s firm stance to maintain increases to the public wage sector bill to below inflation should also be welcomed,  but significant reductions are necessary to improve South Africa’s fiscal position. Public servants should be paid competitive salaries, but we must root out wage thieves that add little to no value.

ActionSA reiterates our belief that the tough choices faced by Minister Godongwana during his budget speech were self-inflicted by the ANC due to years of mismanagement and corruption and hollowing out of state institutions such as Transnet, Eskom and the NPA.

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. It is, however, only the South African electorate and taxpayers that can ultimately decide whether they will tolerate any more budgets tabled by the ANC and the opportunity to determine this is coming next year in the National and Provincial government elections.