MTBPS hits the right notes, but SA’s ‘doubting Thomases’ need to see action

Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) hit all the right notes. His message was one of a government on top of its constrained finances that will spend wisely to address the problems in the country.

It ranged between increased investment in infrastructure, removing (unnamed) policy uncertainty, continuing structural reforms, and creating an enabling environment in which private sector companies can thrive.

Unfortunately, we have heard these promises many times before. South Africa has become a biblical ‘doubting Thomas’: we need to see before we will believe.

However, there is some good (tangible) news – most notably, an increase in tax collection of nearly R85 billion, contributing to the budget deficit dipping below 5% this year. If tax collection can continue to outperform, we will see a primary fiscal surplus (revenue less non-interest expenditure) of 0.7% in the 2024 financial year. It would be an excellent turn-around of the trend of fiscal slippage we’ve seen over the past few years, and even if the state only comes close to achieving these predictions, it will move South Africa back from the fiscal cliff it has been teetering on for years. (Most Thomases will be impressed by this.)

Moneyweb has published several articles delving into the many other aspects of the MTBPS. Please have a read and let me know your views.