Budget Speech Unpacked at the GSB&L Webinar

Mr Emile du Plessis
Mr Emile du Plessis unpacked the National Budget Speech 2023.

The Head of Behavioural Economics and Economic Insights for the Standard Bank Group, Mr Emile du Plessis, unpacked the National Budget Speech 2023 and its implications for business and society at a webinar hosted by UKZN’s Graduate School of Business and Leadership (GSB&L).

Facilitated by Dr Bhaso Yalezo, senior lecturer in the GSB&L, the extensive overview examined how far South Africa has come, developments in the past year and investment in initiatives to improve economic growth and social development.

Du Plessis noted that, ‘In recent years, the development of the national budget has become a tightrope and quite a precarious situation where the Minister of Finance had to focus on fiscal consolidation.’

He added that economic recovery is somewhat uneven and the country has not yet reached pre-pandemic levels. Gross Domestic Product (GDP) grew by 0.9% last year and it is expected to increase by 1.8% in the current fiscal year, with much of the recovery emanating from consumer demand.

In terms of taxation, du Plessis said that there is little room to manoeuvre given the current pressure on consumers. Turning to fiscal policy, he noted that the government is expected to achieve the main budget primary surplus in the current financial year for the first time since 2008.

‘This trend is expected to continue for the next three years and hopefully thereafter. The consolidated budget deficit will decline from 4.6% of GDP to 4.2%, reaching 3.2% in 2025/26. The government is also taking over 60% of Eskom’s debt. This will help to ease the pressure on the company’s balance sheet to enable it to invest in the transmission and distribution of infrastructure. It will also allow Eskom to do the required maintenance to ensure availability,’ he said.

The presentation was followed by a question and answer session with issues raised concerning government spending and why it increases the budget while the country still faces major issues in relation to corruption. Responding, du Plessis highlighted the need to adopt and enforce accountability mechanisms.

‘Conditionality should be attached to how money is spent and Treasury should determine whether or not funds can be released. Certain procedures and processes must be followed and funds should only be forthcoming when municipalities and departments account for how they spent their budget.’

Words: Samukelisiwe Cele

Photograph: Supplied

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