Economy

Supplementary Budget 2020: What was not said

Supplementary Budget: Untenable fiscal position prompts a bold announcement

In its response to the COVID-19 pandemic, the government had to show how it would manage the humanitarian crisis (healthcare and hunger), the negative impact on income and the effect on financial markets. An essential component of the strategy is to keep businesses open and people employed.

We are in fiscal crisis

The numbers were much as expected. The consolidated fiscal deficit is projected to be R762bn. Expenditures have been controlled by reallocation to meet new priorities. The growth in the deficit is largely due to a R300bn collapse in tax collections.

Disappointing emergency budget lacks new policy announcements to accelerate growth and thus enhance the ability for faster fiscal consolidation

Despite the positive sentiment surrounding the emergency budget, it was disappointing that no new policy announcements were made to accelerate the growth necessary to fast track the fiscal consolidation mentioned.