Reactions To Trevor Manuel's 2009 Budget Speech
Responses To South Africa’s 2009 Budget
While some economists and most political parties welcomed Finance Minister Trevor Manuel’s 2009 budget speech calling it balanced and well-thought out, others were more concerned about government efficiency saying in the past there hasn’t been strict action against financial mismanagement and corruption which is the reason why most programmes fail. This is despite Trevor Manuel’s harsh words against corrupt officials who stand in the way of service delivery.
Manuel made it clear that budgeting isn’t only about expanding expenditure on constructive and necessary activities, but it is also about rooting out waste, promoting cost-efficiency and phasing out ineffective programmes. “In the period ahead, it will be necessary to take stronger action in pursuit of efficiency and better expenditure,” he explained.
“I believe our committees should play a more active role in challenging accounting officers to plan their efficiency saving initiatives upfront and report regularly on progress. A greater sense of responsibility needs to permeate the ethos of government all the way through the accountability chain.” However, the finance minister didn’t really offer any practical solutions against mismanagement, corruption and incompetence except to say that he is going to propose that the incoming South African president should introduce a Comprehensive Expenditure Review to ensure that ‘as we spend more, we also spend better’.
Social Development And Poverty Relief
The budget has been hailed a positive one because it provided better health services, poverty relief and basic services. Many people were impressed by the increase in social grants and the money pumped into education. Even more impressive was the R787 million allocated to infrastructure which is expected to create employment opportunities while it also improves people’s lives at the same time.
However, there are those who believe more could have been done. The Children’s Institute at the University of Cape Town felt that the minister had failed poor children by not extending the Child Support Grant up to 18 years. Currently, child support grants are only received by children who are 15 years of age and younger. The institute claims that there are around 2.4 million poor children aged between 15 to 18 years in the country.
Political analysts also say that there is no real policy dealing with the fact that in shanty towns and squatter camps there are no proper roads, electricity, access to water and that people in some of these areas still use the bucket system.
Rural Development
Small farmers and inhabitants of the rural areas welcomed the R1.2 billion the minister gave to the rural areas for rural development. While the Pan African Congress (PAC) political party was happy about this move, they pointed out that previously disadvantaged still people don’t own land and this is a big problem.
Taxes
Big businesses were not pleased by Trevor Manuel’s decision to not provide corporate tax cuts. However, the minister did provide some tax cuts for micro-businesses encouraging more people to start small businesses.
South African Airways (SAA) Bailout
The minister was criticized heavily by both economists and political parties for allocating R1.6 million to SAA to support its turnaround strategy which includes reducing cost and improving efficiency. Analysts say SAA needs proper governance and better management, and that this money should have been used to save and create more jobs.
South African Finance Minister, Trevor Manuel
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