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Enoch Godongwana will now table the mini-budget on November 11

Enoch Godongwana will now table the mini-budget on November 11

Information about Enoch Godongwana will now table the mini-budget on November 11

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National Treasury has confirmed that Minister of Finance Enoch Godongwana will now present the medium-term budget policy statement (MTBPS) on November 11, instead of November 4 as initially indicated.

The department says the new date is as a result of the local government elections set to take place next week Monday. This gives Godongwana some more time before his official debut which comes three months after he replaced former finance minister Tito Mboweni in a cabinet reshuffle.

Wealth and asset management business Anchor Capital expects this year’s MTBPS to table an update on the economic forecast for South Africa and centre around stabilising the economy in the wake of the pandemic and the July social unrest.

“Government revenues are forecast to outperform the February Budget’s targets by c. R169 billion this year, driven by the combination of a better-than-expected recovery in economic activity and a commodity price boom which, in turn, has boosted corporate income tax payments and mining royalties,” says Anchor investment analyst Casey Delport.

However, Delport says that lately government appears to be going into spending commitments that may risk becoming permanent, even as commodity prices have softened.

“Looking ahead, uncertainty about the government’s stance on public sector pay remains, as well as how it will fund the extension of the public employment programme, and whether government will extend the SRD [social relief of distress] grant or even possibly expand it into a full basic income grant. The MTBPS will likely allude to these issues even if it may not fully answer them.”

Chief Risk Officer at SME services provider Lulalend, Garth Rossiter, says the small- to medium business sector is hoping for government to establish an enabling environment for SMEs to thrive in and create jobs.

“The vast majority of jobs come from SMEs in the private sector, so this is where we’d like to see more government support. We want to see plans that help SMEs operate efficiently with as little cost and red tape as possible,” he said.

“We do expect that the minister will continue to look at reducing the corporate tax rate over time to align us more closely with our trading peers and make us more globally competitive.”

Rossiter adds that government will also be under pressure to mention support to millions of poor South Africans, as well as those who’ve lost jobs during the pandemic, as official unemployment numbers are now climbing to 35%.

“Government, like any of the businesses we fund at Lulalend, needs its income to exceed its expenses to avoid running a deficit. To budget effectively, it either needs to increase income or reduce expenditure, but both of these will continue to prove difficult,” Rossiter said.

Nonetheless, Lulalend expects Godongwana to continue allocating money to Covid-19 recovery and the vaccine rollout, as this is important to kickstart the economy and sectors which have been the hardest hit.

Palesa Mofokeng is a Moneyweb intern.

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