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Top reasons why Tito Mboweni's Budget will be one of SA's toughest to date

20 February 2019 11:48 AM
Tags:
finance minister
#Budget2019
Tito Mbooweni

Finance Minister Tito Mboweni will on Wednesday present what’s being dubbed the most difficult Budget speech in the past decade.

Finance Minister Tito Mboweni's maiden Budget speech is expected to be one of South Africa's toughest yet.

Mboweni's budget on Wednesday will have to juggle questions about unemployment, inflation, tax increases, cost-cutting, Eskom's energy crisis, revenue at SOEs, the public sector wage bill and more.

Read: Mboweni will have to make tough political choices in Budget 2019 - economist

Presenter Eusebius McKaiser hosted a panel of economic experts to explore the difficult task ahead for Mboweni and his team.

Elections and state capture

Political economist Lebohang Pheko says Mboweni will have to present a unifying budget in order to restore confidence in the fiscus in light of the upcoming May elections, poor economic growth and revelations of state looting.

Of course, it's an election year so he's got to keep a lot people very happy. Increasing taxes in a year like this wouldn't be a great move.

Lebohang Pheko, Political economist -Trade Collective

He's also trying to redeem himself and this administration. It's probably one of the toughest budgets will ever hear.

Lebohang Pheko, Political economist -Trade Collective

Competing priorities

Political Economist Siya Biniza says government has a tough balancing act to achieve in the budget break down.

He says government needs to commit itself to tightening spending in order to tackle growing public debt, while also supporting economic growth and job creation.

Government has to commit itself towards fiscal consolidation, but at the same time it has to support growth and employment. It's really a catch 22... Where is the money going to come from?

Siya Biniza, Finance and operations director - Political Economy Southern Africa

There's very limited fiscal place.

Siya Biniza, Finance and operations director - Political Economy Southern Africa

Managing expectations

Chief economist Lullu Krugel says trade unions, small businesses, government employees, ratings agencies, international investors and many other interest groups are watching closely for Mboweni's action plan.

All of these groups believe their interest should take precedence, she says.

Tito Mboweni has the toughest task this afternoon. It's definitely the toughest budget since the financial crash in 2018.

Lullu Krugel, Chief Economist - PwC South Africa

Everybody has different views of what should come out of this budget. Everybody will have different interests. At the end of the day, he will not be able to please everybody.

Lullu Krugel, Chief Economist - PwC South Africa

Listen to the in-depth discussion on The Eusebius McKaiser Show:


This article first appeared on CapeTalk : Top reasons why Tito Mboweni's Budget will be one of SA's toughest to date


20 February 2019 11:48 AM
Tags:
finance minister
#Budget2019
Tito Mbooweni

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