Budget 2022: Is Government starting to listen to public despair?

Less reliance on increases to fuel levies and relief on personal and company taxes are encouraging, but South Africa’s economy continues to waste precious resources on disastrous non-core SOEs, whilst lacking in structural reform implementation.

OUTA welcomes the first year of no increases in the general fuel levy and Road Accident Fund levy on fuel in more than two decades, and sees this as a sign that government might be paying more attention to calls from civil society in this regard.

“Following letters, calls and protest action from OUTA, the AA and others to halt the incessant increases to the fuel levy and RAF levy, we believe the Minister heard us and has realised how costly the compounding impact of past levy increases have become in the overall price of fuel,” says Wayne Duvenage, OUTA’ s CEO.

We are also pleased that Minister Godongwana not only capped the levies, but promised a review of the petrol price structure.

Much of the Budget seems to be treading water and makes mention of very necessary structural reform, but is less convincing in the implementation thereof. Decades of waste and corruption have left our fiscus eroded, with sectors like education needing immense help to boost our skills levels. The recognition of the need for more funds to be allocated to law enforcement, prosecutions and the fight against corruption is encouraging. The question is, will this be enough?

We urgently need to see the structural reforms promised every year: restructuring of state-owned entities and closure of the non-essential state companies (like Denel and SAA, which both get bailouts), whilst also removing red tape and barriers to doing business in South Africa.

We also welcome the Minister’s attempts to cap the wage bill, and his prudence in not allocating a good portion of the commodities windfall to addressing our debt burden.

The Treasury promises to look at the Zondo recommendations and to tighten up the financial gaps in oversight, which we welcome. However, we are concerned that the Special Investigating Unit, the Hawks, the Asset Forfeiture Unit and the NPA’s Office for Witness Protection - all crucial in investigating state capture - together get R3.060bn, which is less than the R3.122bn allocated for VIP protection, which is an unfortunate illustration of government priorities.

SOE bailouts are a direct consequence of mismanagement and lack of accountability and transparency. To date, we have heard a lot of talk regarding more robust procurement practices and zero-based budgeting, but very little in the way of implementation.  

The budget for the Department of Water and Sanitation, which gets R18.5bn, (of which R12.7bn is used for water services management that includes allocations to water boards and municipalities) appears to be a move in the right direction to address our dire water security issues. However, the state of our water resources and the growing volumes of sewerage into our dams and rivers demands that we treat this issue as a national disaster. The amount allocated to local government is insignificant when it comes to dealing with the growing pollution and infrastructure failure. In many cases, national government is forced to become more involved in the provision of water at a local level – a case in point is the Vaal Dam, where the SAHRC directed the DWS to intervene.

The National Water and Sanitation Master Plan notes that municipalities lose about 1660 million cubic metres of water a year, worth nearly R10bn a year. OUTA believes that fixing leaks and waste-water treatment plants should be a priority.