The Treasury made a robust defence of its supplementary budget in parliament on Friday, saying attacks against it by a group of economists and civil society organisations are riddled with misrepresentations.
It is not true, as the economists claimed, that the budget reneged on President Cyril Ramaphosa’s R500bn relief package, because a large part of the package was funded by reprioritisations rather than new money, he said. The budget is in line with Ramaphosa’s statement that the package would be partly financed by R130bn in reprioritisations. This means addressing low priority, low efficiency and wasteful expenditure.
He stressed that the supplementary budget does provide for additional spending to deal with the pandemic and this could be seen in the expansion of the budget deficit to “a frankly unsustainable level”. The supplementary budget represented the most expansionary budget in many years, resulting in an unprecedented rise in the budget deficit and an unprecedented increase in government borrowings to an unsustainable level.
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