MTBPS: Enoch Godongwana Delivers Bleak Mid-Term Budget With R5.2 Trillion Debt Forecast for 2024/25
- Finance Minister Enoch Godongwana delivered the mid-term budget policy speech and gave an overview of government spending
- So far, the government owes trillions and is expected to borrow more money in the coming financial years
- Briefly News took a look at how much money has been allocated to sectors and how much debt the country owes
- Tebogo Mokwena, a Briefly News current affairs journalist in South Africa, covered policy changes and elections at Daily Sun and Vutivi Business News for over seven years.
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The Minister of Finance Enoch Godongwana delivered his mid-term budget policy speech for the 2024/25 financial year and things do not look good. The government spending has been cut down by R21 billion and the debt is at a staggering R4.8 trillion for the 2023/24 financial period.
There has been some growth in some sectors, but municipalities are still drowning in debt. Briefly News provided a breakdown of the MTBPS speech, how deep in debt the country is and how much the government will spend in the mid-term.
1. Debt
According to Godongwana, the national debt will go up from R4.8 trillion in 2023/24 to R5.2 trillion in the 2024/25 financial year. The debt will exceed R6 trillion in the 2025/26 financial year. The interest this debt accrues is R385.9 billion for this year and will rise to R1.3 trillion next year.
2. Spending on health, education and police services
The government will spend R24 billion this year and R74 billion over the medium term to accommodate the wage increase for the health, education and police service sectors.
3. Debt relief
Godongwana revealed at the mid-term budget policy speech that Eskom’s debt from up to 31 March would be written off over three years. Sixty-seven municipalities applied for their debt, totalling R56.8 billion by the end of March this year. Of these, 28 municipalities’ applications have been approved. Eskom will be allocated R254 billion for debt relief.
4. R350 grant
The speech showed that R34 billion has been allocated to the Social Relief of Distress (SRD) grant, and it will continue until the social grant system is reviewed comprehensively.
5. Municipal disaster
The government allocated R21.2 billion to the Municipal Disaster Recovery Grant and R372 million to the Municipal Disaster Response Grant to help restore infrastructure destroyed by disasters like the KwaZulu-Natal floods, which destroyed homes.
More tax if Basic Income Grant is approved: Godongwana
In a similar article, Briefly News reported that Enoch Godongwana said that citizens would pay more tax if there were to be a Basic Income Grant.
He spoke before tabling the budget speech this year and said that while taxes won’t be increased in 2023, the following year might be a different experience and that more tax would be imposed if the Social Relief of Distress grant is to be turned into a Basic Income Grant. South Africans remarked that the country is a failed state.
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Source: Briefly News
