The Standing Committee on Public Accounts chairperson, Songezo Zibi, said on Thursday there was a need to fix a whole lot of problems to get to a point where fiscal leakage was stopped and public finances began flowing to the right things.
“We have to do the work of releasing funds that are stuck in inefficiencies, incompetence, and poor planning so that those funds can go towards investing in things that will fix the economy,” Zibi said.
He made the statement during the post-Budget briefing by chairpersons of finance cluster committees when they were asked about pressure they could make on the relevant portfolio committee and those involved regarding the review of fuel price structure.
This is after the Finance Minister Enoch Godongwana proposed the increase of fuel levy, which is believed will hit the poor and inevitably lead to an increase in transport costs.
In his response, Zibi noted that there were serious reductions made in the Budget that ranged from education, health, and infrastructure, among others, compared to allocations made in the March Budget.
“The question about VAT, fundamentally, was about how much money we should allocate for those problems. Do you want to give the government more or less money? The view was that the government should get less money – that is the impact. The question, really, is not about the fuel levy, but how much less you want to give the government and which of the things we must continue to cut,” Zibi said.
He also said there must be short-term pain as part of resourcing the things the government must do.
“There must also be work on spending reviews,” said Zibi before noting that there was no accountability for those who waste public funds and that the government continued to overpay for goods and services.
Mmusi Maimane, chairperson of the Standing Committee on Appropriations, said the process of reviewing the fuel price must be paramount.
He also said his take on the Budget was that Godongwana was operating within a very constrained wiggle room, and the one cushion that could be relied on was that inflation was relatively low.
“I think we need to really review how we look at the fuel price, and therefore I will certainly raise the question with the Minister of Finance tomorrow,” Maimane said.
He emphasised the importance of strengthening the currency and benefiting from the weakening dollar.
“We have to ensure the trade balance is stronger, and therefore, I can’t stress enough the importance of attracting foreign direct investment. Part of that is to have a stronger currency to ensure, actually, your currency is not weak, so that purchasing power on oil is lower and will help with fuel price,” Maimane said.
Joe Maswanganyi, Finance Committee chairperson, said citizens and the corporate sector have the responsibility to pay tax to fund public services.
Maswanganyi said there should be no promotion of a situation where the public and corporate do not want to pay taxes.
“There is no state that can function without revenue; otherwise, if you run a state on populace, at some stage, that state will collapse. Taxation enables the government to fund essential public goods,” he said.
However, Maswanganyi said they understood the implication of the fuel levy increase, but stated that it has been mitigated.
“The minister spoke about putting more money into transport, and in this regard, on the commuter rail system. It is highly subsided and is quite cheaper compared to other modes of transport in South Africa. The more you have commuter trains back on the railway lines, the more the poor, working class, and workers will use that mode of transport.”
He blamed the legacy of apartheid planning for the high cost of transport, as the poor stay far away from towns.
“It is not to end in a few years to come. That is what we have to live with. It was deliberate,” Maswanganyi said.
