Scholarships, elections main drivers for 2023/24 budget – Minister

By Khulile Thwala

The Minister of Finance Neal Rijkenberg has identified scholarships and the upcoming elections as the main drivers of the budget that will somewhat need to be increased for the financial year 2023/24.

The minister is expected to present his annual budget speech in February. Rijkenberg said ministries and government departments were drawing up reports in preparation for the budget speech next month and it was incumbent that the elections scheduled for this year are also included in the national budget.

“It is the fiscal deficit that we have been fighting, trying to bring down. By fiscal deficit, we mean money you do not have in your budget the money you need to spend. Over the years, coming from a previously double-digit fiscal space, the year before last we were at 7.5 per cent, last year 6.5 per cent, 4.5 per cent this year and we are aiming towards 1.5 per cent fiscal deficit in next year’s budget,” said the finance minister.

He said the 1.5 per cent still needed proving to get right but it would be a huge breakthrough because a 1.5 per cent fiscal deficit means that you are in a sustainable territory.

“It means that your debt to GDP does not grow even if you might take on more debt, it is in line with your GDP growth which means your debt to GDP remains the same. For that reason, we are aiming strongly towards 1.5 per cent.”

The minister says with the upcoming elections, which cost more money, they had additional costs in the human capital, as there was an urgency to employ people.

“We have been keeping a very tight hold on employing civil servants, but unfortunately at some point, the work stops being done so we are having to fill critical posts and that will also cause a movement in the budget. In terms of scholarships, there have been more issued than we have in the budget therefore that needs to be accommodated so these will be the main drivers for a budget that will need to be increased somewhat to be able to accommodate that.”