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Budget

 


If you know me, you will be aware I am not an economist, but we are all economists when its comes to balancing a budget whether its small like mine or humongous like South Africa’s.

This week here in SA we have what is called a mini Budget or the MTBPS. Some information to set up the situation here. It is generally agreed that 2.2 million people lost their jobs in SA in the 2nd quarter this year. But what is also important to know is that 1 job = 5 dependents, many of these newly unemployed will be low skill low paid with no savings. When a job is lost there is no food in the cupboard and the hit on family life is immediate.

So the budget, here are some of the figures that form the difficulties around the budget. We have had in South Africa the most stringent lockdown anywhere in the world. So the lead up to this budget is not a good one.


South Africa has the privilege of having its own airline SAA which has a fleet of 16 Airbus aircraft to put that into perspective British Airways 249 aircraft. These numbers are changing. But SAA needs R10.4Billion to keep it alive (between 2017-19 SAA received for the SA government R15.7Billion). Another figure quotes SAA having 58 aircraft, 55,500 employees and 957 employees per aircraft. Whichever the figure the challenge to keep this airline flying is enormous if not impossible.

The SA Post Office is seeking R4.9 Billion package from the government some say SAPO will not be able to pay its staff shortly


Another challenging figure 1.2 million now that we are back in millions not billions but that 1.2million people employed by the state. That could be good thing but this 1.2 cost the government takes up 40% of state expenditure. For many people, their ambition is to get a government job providing them with guaranteed pay and pension.   

ESKOM is the state power supplier of energy and The SA government says no one else can supply energy to its people. We have just had a difficult year with Load shedding here in SA electricity off for many hours a day. The old power stations a poorly maintained and have very little financial investment and most run on coal. The new power stations are not online yet after many promises.  ESKOM is the most frightening challenge to the SA budget and future economy ESKOM owes the government R488 Billion. The government has already promised R23Billion a year for 10 years. Those who know these things say that figure could sink this country.

Safari Lodges all over the country have closed down some for good some might have the resources to face out the crisis. For each lodge standing idle and not bringing in foreign tourist this results in more poor local people not being employed and not being fed. There some reports how this has C19 Lock down situation has affected the wildlife with survival poaching in some areas of Kruger Park.  



 

One figure says 3 million people paid personal tax out of a population of 56 million so balancing any budget is going to be impossible without intervention from somewhere.

I do not write this to make any political point but to draw my and your attention to the massive difficulties South Africa faces. The numbers are often confusing but whichever number you go for the situation facing South Africa seems impossible to fix.  Andrew Harding The BBC correspondent says of lockdown that, “The economic price has been devastating, though. President Ramaphosa spoke of hardship and hunger for millions, and warned it would take years to rebuild the economy” https://www.bbc.com/news/world-africa-53795339.

To put some of that into context Domestic workers are entitled by government direction to a minimum wage of R15.57 per hour. the exchange rate today is 21 r to the pound. That is 75p per hour. 

If you are interested you can check the stories and figures all I encourage you to do is to pray for this country in very difficult times.

and a BIG thanks for all of you who support us. 

 

https://www.msn.com/en-za/news/other/mini-budget-the-state-of-south-africas-broke-n-ness/ar-BB1anJhm?ocid=se

http://www.702.co.za/articles/367991/listen-how-many-employees-does-saa-have#:~:text=An%20inforgraphic%20is%20doing%20the,and%20957%20employees%20per%20aircraft.

 

https://citizen.co.za/news/south-africa/government/2225800/3m-people-shoulder-almost-all-of-sas-tax-burden/

 

https://www.dailymaverick.co.za/article/2020-09-10-saa-faces-cash-crunch-as-funding-from-the-government-is-held-up/

 

 

 

 

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