Budget deficits over the next few years are going to be largest South Africa has ever had.
The deputy minister of finance, David Masondo, confirmed this during an address at the 2021 Savings at Work Conference.
The deputy minister emphasized that Covid-19 “has really battered our public finances”.
The recession has resulted in lower tax income than expected and money has had to be spent on supporting the economy and households.
“It is true that high commodity prices have helped us bring in more revenue than National Treasury projected in the Supplementary Budget last June, but we are still far, far below where we thought we would be when we presented the budget in February 2020”, he said.
The deputy minister stressed that the priority is to get the financial house of government in order.
“If we don’t do that, we will have even deeper crises down the line and a deeper crisis is in nobody’s interest”, he said.
According to the minister, government is going to have to “spend less than we probably want to spend to respond to all the needs that we have” in order to extricate the country from a “very tough situation”.
“And, precisely because we can’t spend as much as we might want to, we have to spend much better. That is the only way that we will make progress against poverty and inequality and slow economic growth.”
Meanwhile, in Government Gazette 44537, national treasury published the allocations to be made to the metropolitan municipalities from the General Fuel Levy Revenue for the 2021/22 financial year.
The allocations are made in terms of the Taxation Laws Amendment Act.
The City of Cape Town Metropolitan Municipality will receive R2 608 900; City of Johannesburg Metropolitan Municipality R3 921 074; eThekwini Metropolitan Municipality R3 012 812 and Nelson Mandela Bay Metropolitan Municipality R701 573.