2021 budget speech live: Tito Mboweni delivers this year’s financial plan [video]
South Africa has a mountain to climb to get to the recession state it was placed in before the pandemic and this ambitious plan will be heard in Parliament when Finance Minister Tito Mboweni delivers his 2021 budget speech.
Watch live: Tito Mboweni delivers 2021 budget speech
Much like the State of the Nation Address (2021 SONA), Mboweni’s annual financial plan will be limited by strict health protocols. The 2021 budget speech will go live at 14:00 and you can catch it by tuning into the live stream below:
Three key points to look out for
Millions of South Africans will be tuned in to find out what plans the government has to restore parity in our economy. South Africa’s debt is bloated with emergency loans made to sustain the demand of the Covid-19 pandemic, the outlook on our economic future is grim, to say the least, and unemployment is soaring at 32.5%. So, what will Mboweni announce in this year’s budget speech?
We took a look at three key points he may cover and they are:
Covid-19 impact on the economy
In a forecast report published by Brookings, a US nonprofit public policy organisation, it is stated that South Africa was forced to spend more than it could afford in 2020. Much of this is owed to the Covid-19 pandemic.
“Although the country’s pre-pandemic forecast for debt-to-GDP ratio for 2020 was already high at 65.6%, supporting the economy through the pandemic required the government to breach the spending ceiling and expand its borrowing—raising the forecasted debt-to-GDP ratio to 80.5% for 2020,” the report notes.
Mboweni will have to indicate where the repayment monies to nurse the growing debt will come from.
Recovering the fiscus – will taxes rise?
This leads us to the National Treasury’s plan to funnel more money into the public purse to nurse the damage dealt by a multitude of factors, i.e. Covid-19 and corruption.
Already, there is a great sense of worry that Mboweni will have to increase income tax and VAT to carve an easy path to filling the fiscus.
Sin taxes and other levy increases are expected. Some in the private sector have threatened a tax revolt if this is, indeed, what is announced by the finance minister.
The recovery plan
Central to Tuesday’s speech, foreign investors and stakeholders will be listening out for Mboweni’s plan to save the Titanic. The minister will most likely add more substance to the Employment Stimulus Package spearheaded by President Cyril Ramaphosa. We expect a few more fresh ideas on the government’s plan to recapture economic growth from the minister.