Budget speech: Unemployment, R350 grant on Godongwana agenda

He is set to address the National Assembly on Wednesday. 

Independent economist Duma Gqubule says this will not be an easy task considering that Godongwana inherited a country with a high debt compared to GDP ratio, unemployment, struggling SOE's and crippled businesses due to the Covid-19 pandemic and the July unrest.

"The IMF forecasts 1.5% growth between 2022 and 2026. This means that unemployment will continue to increase over the next five years. 

"So what do we need from a budget? We need a budget that is going to address this unemployment crisis unemployment crisis, and the revenue situation has improved and the dept situation has improved." 

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He says although the minister is expected to extend social relief grants, there is fiscal space within the current budget to finance the recovery of the economy. 

"Is that they will extend the social relief of distress grant for a whole year at the cost of R44 billion. They will also continue funding the Presidential Employment Stimulus, which creates part-time jobs at R9 billion, so that is the thing we know will be in the budget. 

"The focus on economic growth is around 1.5%. We need to have a stimulus that is going to lift the growth rate well above 1.5%." 

Gqubule says while he heard from a trusted source, there will be no major tax rate changes, but we can expect the minister to announce a bailout for struggling SOE's. 

"There was speculation that you might see something in the budget in terms of reducing Eskom debt. 

"Government has been talking about this for about four years, so the proposals that are on the table is that so there is about R400 billion, so we might see some of that debt going on to the national balance sheet." 

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