Mini budget: All you need to know ...

Hi John

Finance Minister Enoch Godongwana delivered his inaugural ‘mini’ budget speech on Thursday when he tabled South Africa’s 2021 Mid-Term Budget Policy Statement (MTBPS) in Parliament in Cape Town.

This is his most high-profile address since taking over the Finance Ministry top job following Tito Mboweni’s exit in August.

Economists, investors, opposition parties, organised business and labour were keen to see if Godongwana stuck to SA’s much-vaunted Operation Vulindlela structural reform plan tabled by his predecessor Mboweni. The business sector will be happy to hear that he is staying the course.

Godongwana did not make any major new policy announcements. But this was to be expected, considering it is the ‘mini budget’ which generally deals with longer-term planning.

What he did make clear is “government’s unflinching commitment to fiscal sustainability” by slashing the budget deficit and stabilising debt over the medium term. This will mean no room for further major bailouts for state-owned enterprises, but we will have to see if that holds true.

With the delay in tabling the 2021 MTBPS to November, Treasury only has a couple of months to work on the main budget (which traditionally takes place in February), bearing in mind the December/January holiday period.

Furthermore, Godongwana has only been Finance Minister for a little over three months now. He is likely still finding his feet and will be more settled in the position by the time of the main budget early next year.

More focus will be on the main budget and the direction Godongwana decides to take.

Nevertheless, the 2021 MTBPS had some good news (as expected) around the tax windfall from booming commodity prices and consequently the eased budget deficit.

This special Moneyweb newsletter on the mini budget, together with reports on our website and radio shows, offers comprehensive coverage and analyses. We trust you will find it insightful.