A rare bright spot in a depressing national budget

Looking for positives in the 2019 Budget speech tabled in Parliament by Minister of Finance Tito Mboweni on February 20, Steven Nathan, 10X Investments chief executive officer, pointed to the plan “to allow older public servants who want to do so, to retire early and gracefully”.

Mboweni said this early retirement programme “will save an estimated R4.8bn in 2019/20, R7.5bn in 2020/21 and R8bn in 2021/22”. 

Steven was hopeful it might be the beginning of something more comprehensive. He said it should give “some comfort” to taxpayers: “Maybe one can get a positive there, that this is the beginning of trimming a very bloated civil service.”

Mboweni said the programme would “in time … be complemented by limits on overtime and bonus payments as well as pay progression”. 

He added that “the system of staffing our diplomatic missions is unjustified and should be reviewed urgently”.

Steven said that overall, the Budget Speech was in line with expectations, which were “very low and quite depressing”. See coverage of Steven’s breakdown of the numbers and further commentary here: http://www.safrica24.com/business/10x-investments-takes-on-mbowenis-budget2019/154921-news

Millions vs Billions

One area where Steven voiced particular concern was how many billions of rand are earmarked to pay debt and support beleaguered state-owned enterprises (SOEs) yet mere millions are made available for to support small business, despite the latter being a key engine of growth in South Africa.

He said talk about SOEs not being Holy Cows in the Budget speech was not followed through with any policy to speak of.

“The Budget talks about an increase in financial support to Eskom of R23bn and a contingency reserve for other SOEs of R13bn so we have an additional R36bn for SOEs. If you look at the flipside, what initiatives there are for growth – a fund for small businesses of R486m.”

Steven added: “The concern is that when we talk about growth initiatives and supporting small businesses we talk in the millions; when we talk about debt and guarantees to state-owned enterprises we talk in the billions.”

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