Budget 2022 | Expectations from finance minister

Finance Minister Enoch Godongwana will deliver his maiden speech at 2pm. He has the difficult task of explaining how government plans to service its debts and its people. eNCA speaks to Leon Louw from the Free Market Foundation. Courtesy #DStv403

All right good to have you back let’s continue our build up to the budget uh this morning finance minister ino gonowana will deliver his maiden speech at two o’clock this afternoon he has the difficult task of explaining how exactly government does plan to service its debts and its people so let’s head back now to the johannesburg stock exchange and gareth i know

You have leon lowe from the free market foundation to help us just unpack some of these issues yeah that’s right uh welcome back to the jsc we’re going to see what the numbers are looking like a little later today as we get closer and closer to that finance uh budget speech coming out from the finance minister 2pm of course live here on enca we’ll see what those

Markets are looking like we can’t expect some reaction of course what’s happening uh with the local currency versus the major currencies the euro the dollar and the british pound but that is a conversation for later speaking of markets let’s bring into the conversation uh from the free market foundation mr leon low mr lowe always good to have you with us so what

Are you expecting because i have two thoughts on the budget it’s one thing to talk about the money we don’t have as a country two where and how do we use that money yes the answer to that is much less complicated than people imagine you just look around the world at what works what are the winning nations and what are the losers and the winning nations do one

Simple thing they follow the economic freedom of the world index if you have a higher score on it you do better you grow you have jobs you have investment and if you have a lower score you do badly more importantly if you’re moving upwards even if you start low like china or you’re moving downwards even if you start high like america if you start high and you go

Down you stagnate if you start low and you go up you boom you prosper and so that’s what we have to do we have to actually reduce the role of government we have to reduce government spending we have to reduce the deficit which is now approaching 100 of gdp and then we will boom and prosper it’s really that simple and this was promised in the state of the nation

Address so the big test of this budget is will it resonate with the state of the nation address which promised removal of red tape investor friendly atmosphere cutting of government spending and then the other big thing it was promised over and over again we would get zero-based budgeting why is that never mentioned anymore what happened to it what would that

Be that means that every government department is not presumed to be justified to what it now has it has to fully justify every cent it spends de novo as if it doesn’t exist if it didn’t exist what would it do what why why would it need to exist and what would its functions be now this was promised we were told it was well advanced and we were told it would be

In by last year now it’s never mentioned anymore so will we hear about that i doubt it will we hear about catching the budget to cutting the deficit i think we will we hear every year that it will be cut in the future and it’s always in the future it’s always two years hence that it will be cut and i remember joe slovo once joked with me uh he said people say

I’ve given up marxism he says no i haven’t i’m still think that there’s going to be a revolution and i say it’s five years hence and i’ve been saying that for 50 years so he used to joke about him this is them they keep telling us red tape reduction is in the future zero-based budgeting in the future cutting the deficit is in the future cutting wasteful so eases

In the future it’s never now so let’s hope this budget for once says we have done something yeah uh speaking of government control and this might be erring a little off of the budget uh speech a little bit let me get your thoughts on this uh the president coming out and saying it’s up to the private sector to create jobs is that a handoff from government saying we

Actually don’t know what we’re doing let private industry take over or is that exactly what you’re calling for less government control over jobs well it’s extraordinarily insightful i mean it’s sort of obvious for the government to create a job it must take the money out of the private sector every round expense is a money that’s been taken from somewhere from who

From the private sector so what he’s saying is leave the money in the private sector it is better at creating jobs with it then the government if it takes it away the private sector jobs are lost and then will the government create as many or more jobs with that same money government doesn’t create money it doesn’t generate wealth it takes wealth so he’s absolutely

Right if you want to have job creation you have to leave the wealth with the job creators and those of the private sector i’ve been asking all the guests that have been so kind to join me leon here at the jsc this morning uh the finance minister i know putting on the final touches uh to his speech he’s left a paragraph open i know he hasn’t finished it he’s giving

That paragraph to you leon low from the free market foundation what does the finance minister write down today he writes down saying that the past has been a legacy of promises that were never fulfilled in every sauna every budget speech every ministerial budget this time is new this is different this time what we promise will happen and what’s more we’ve actually

Done things that were promised in the past that will be the turning point for south africa on the road to prosperity john i always appreciate speaking to you nice to have you in person as well not have you on a on a computer

Transcribed from video
Budget 2022 | Expectations from finance minister By eNCA