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The DA has praised Minister of Finance Tito Mboweni's "honesty" in recognising the country's "precarious financial situation", but said his proposed fixes for reducing SA's growing debt burden were all talk and no action.
The ANC, meanwhile, was broadly positive about what the finance minister announced, saying the mid-term budget "captures the ANC's 2019 Manifesto commitments". In the same statement, the party said it supported the plan to split Eskom into three parts: transmission, generation and distribution. This unbundling has been criticised by some in the party's alliance partner Cosatu, which fears it may lead to job losses.
The official opposition's finance spokesperson, Geordin Hill-Lewis, said the DA welcomed Mboweni's "tough talk on cutting the public wage bill and on the mismanagement of state-owned entities".
"For all the tough talk, the minister’s bark was worse than his bite. The spending cuts he did announce – roughly R50bn over the next two years – will not be nearly enough to slow down the ballooning of national debt, and will not be enough to restore credibility with ratings agencies."
The finance minister said on Wednesday that depressed economic growth, a projected tax shortfall of R52.5bn and bailouts for cash-strapped public entities left him little leeway. National debt now tops R3trn and is expected to grow to R4.5trn by 2022/23 - or 71.3% of GDP.
Mboweni told MPs on Wednesday that government's wage bill had to decrease, as it was crowding out other spending. Of every R100 paid to the state in tax, R46 is spent on state salaries.
Hill-Lewis said the finance minister may have talked tough on the wage bill, but he "didn’t do anything about it". "All of the cuts he announced will be applied to 'non-compensation' spending, with no cuts to the R630bn wage bill. Effectively, he procrastinated again on the tough action needed to turn our finances around."
He said it was indefensible that more money would be spent on what the party has taken to referring to as "Zombie SOEs", including paying off R9bn in government-guaranteed debt of state flag carrier South African Airways.
The ANC in a statement echoed Mboweni's calls for government departments, businesses and consumers to pay bills due to Eskom. The power utility is owed about R25bn from errant municipalities.
The party said it also supported the reduction of fringe benefits for government officials. "Leadership must lead on this matter, and we welcome the reduction of fringe benefits to political office bearers, less expensive cars, and cheaper modes of air travel as well as capping of salary increments below [inflation]," the statement read.
"We all have to put shoulder to the wheel and make the sacrifices so that we get our transformation agenda on track," the ANC said.
EFF deputy president Floyd Shivambu told Fin24 there was nothing new in the mid-term budget. Speaking to journalists on the steps of Parliament after Mboweni delivered his address, Shivambu said the finance minister had "ignored" the fact that there had to be a fundamental change in the structure of the South African economy.
Shivambu said Mboweni should rather have talked about reindustrialisation and strategic import substitution, saying the mid-term budget was characterised by "neo-liberal drivel".
