Budget 2024 – No new bailouts for SOEs, consumers to shoulder tax revenue shortfall

Follow live updates of Budget 2024 here.

Every year, under the spotlight of Cape Town City Hall, Finance Minister Enoch Godongwana delivers the National Budget Speech to the South African Parliament. Budget 2024 would have been particularly challenging to put together.

This Budget speech outlines the government's spending plans for the year ahead, balancing economic growth with support for the vulnerable amidst limited resources. It details revenue collection strategies, key priorities, and proposed allocations across essential sectors, offering a snapshot of the nation's financial health and future direction.

South Africa’s deficit for 2023 increased to 6% by the latest public account, just a couple of months after the 1 November Medium-Term Budget Policy Statement (MTBPS) set the deficit at 4.9% – already up from the 2023 February Budget forecast of 4%. This must raise serious concerns.

Read more in Daily Maverick: Stagnating economy, ballooning wage bill and struggling tax base – Godongwana’s Herculean task

Into this mix come continuing and increased losses by key state-owned enterprises (SOEs).

SAA lost R771-million and its technical wing, R51-million. Denel lost R463-million and the SA Post Office, under provisional liquidation since July 2023, lost R976.6-million, according to a National Treasury presentation to Parliament’s Standing Committee on Appropriations on 14 February.

SAA, Denel and the Post Office are repeat beneficiaries of bailouts.

Transnet, which has publicly negotiated with National Treasury for a bailout, received a government guarantee of R47-billion – but not cash – in December 2023.

And Eskom, which in the 2023 Budget got an effective R254-billion bailout, remains a problem child – regardless of Electricity Minister Kgosientsho Ramokgopa’s spin.

Poor economic growth will also be a factor in the 2024 Budget speech. Most forecasts for South African growth for 2024 are pegged at between 1.0% and 1.5%. This is simply not brisk enough to make a dent in swelling levels of debt — unless the Treasury takes a chainsaw to spending, unlikely to happen in an election year.

For the finance minister, Wednesday’s Budget means difficult decisions,  made more difficult by the pressure for populist and other shortcuts in the heavily contested 2024 elections.