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REFLECTIONS ON THE SOUTH AFRICAN

GOVERNMENT’S 2023 BUDGET SPEECH

Glen Robbins Luke Muller

outh Africa’s Minister Energy Matters energy, ports, rail, roads, and In the coming weeks it is ABOUT TWIMS
of Finance, Enoch Probably the stand-out feature water provision were heighted as important to take a close look
SGodongwana, presented – and one against which much areas of priority. The Minister also at the policy statements of the
the government’s 2023 Budget of Government’s actions will signaled, as his predecessors often Minister of Trade, Industry and Established by the Toyota
to Parliament on 22 February. be measured in the coming have, that attention would be paid Competition and those of other Wessels Trust, the Toyota
to enhancing the performance
Glen Robbins and Luke Muller years – was the attention paid to of municipalities. One can hope ministers with scope to influence Wessels Institute for
went through the budget electricity matters. The scheme that those running municipalities the manufacturing terrain. More Manufacturing Studies
material and have highlighted enabling accelerated deductions will take heed. On this theme, will have to be done with less (TWIMS) is a not-for-profit
some of the features that could for renewable energy investment environmental disaster matters did resources, and this will inevitably initiative dedicated to the
be of interest to the wider by businesses was widely expected. receive some support. Businesses require deeper partnerships with development of manufacturing
manufacturing ecosystem in It can potentially support better will hope that at least some of this private actors. The coming years executives in Africa. We are an
the country. resilience in firms and lower will translate into actual projects to will be a real test of this. Business open institution, welcoming
The 2023 Budget shows that of carbon emissions in supply chains. rehabilitate infrastructure in and organisations will need to mobilise in students from all industries
their resources to both hold
the allocated R1,897 billion in The Minister stated that, “Under around industrial areas. government to account, and to be and backgrounds.
expenditure, over R700 billion the expanded incentive, businesses more active in supporting areas TWIMS’ world-class facilities
will go towards the public will be able to claim a 125% Personal Tax where delivery has been failing. and staff place it at the centre of
service wage bill and R346 deduction in the first year for all Whilst personal tax matters Investments and their related job a manufacturing community
billion will be allocated to old renewable-energy projects with no are not always raised in the creation going forward will have dedicated to value creation
age grants, social security funds, thresholds on generation capacity.” context of the manufacturing to be private sector driven. and societal transformation.
child support grants and other Furthermore, National Treasury sector, many of the more than The TWIMS campus is
grants. A further R50 billion is will work with the banks to direct two million people employed in State Delivery part 21st century build and
spent on the National Student lending to support much needed manufacturing and supporting This budget speech should
Financial Aid Scheme. The renewable energy investments for sectors, such as logistics, will perhaps be appreciated for the associated technology, and
little that is then left over small and medium enterprises. appreciate the modest relief in intent to focus government part refurbished historical
has been thinly spread over Still on energy matters, the tax burdens with the shifting up on trying to get the proverbial grandeur. Situated on a tranquil
other government functions Minister’s assertion that National of tax brackets. Some too will nuts-and-bolts in place for better corner of our campus, the
and infrastructure upkeep. Treasury will more actively appreciate the prospect of the state delivery. That said, it was TWIMS accommodation
In addition, the government’s support Eskom’s recovery, with somewhat meagre tax rebate for not a budget to help the country offers students quality,
debt service costs will jump to both the carrot of shifting debt citizens seeking to install some affordable accommodation
roof-top solar at their homes. For see much beyond the horizon
R340.5 billion, driven by rising off Eskom’s books and with the of the constrained medium- and sumptuous breakfasts in a
global interest rates and the stick of increased controls and business in the manufacturing term expenditure framework. It pristine park-like environment.
sector, it might well be a
partial take-over of Eskom debt. surveillance, will hopefully relief, that in a context of the was also a budget that cut real The staff are passionate
help stabilise the parastatal’s
In this context, it is no considerable fiscal pressures on spending in some key social individuals dedicated to
surprise that the budget operational performance. While the state, corporate tax rates areas. These measures impact delivering a world class
speech was, if anything, a the Eskom debt arrangements have not been adjusted upwards. also on business in that they experience to you.
placeholder, a device to support are not fixed investment, they can translate into challenges for We provide formal
Government’s attempts to shore do potentially support other Economic Policy employees and their families, academic courses through
up the state, its services and measures to encourage a diversity With a low-ambition budget such whether it be accessing health our partnership with
the weak economy. This Budget of energy supply investments in as this, especially one that steers care or affordable transport. Gordon Institute of Business
the country, including for the
was clearly not an attempt to clear of many areas of controversy Getting South Africa’s
frame a visionary structural increasingly inadequate national (think reserve bank mandates development prospects back on Science (GIBS), as well as
shift. Under the circumstances grid. This could better support etc.), there is perhaps a relief that track is still very much a work- a range of non-academic
access to energy for businesses and
the pragmatists that tend to could also help stimulate demand the Minister did not engage in in-progress. short courses.
find a home in manufacturing for those businesses in the supply a Don Quixote-type crusade. Note: This note was prepared by
would suggest that a mundane chain of energy projects, from In previous years, ministers of Glen Robbins and Luke Muller
budget was probably better than construction materials through finance have often sought to give with input from Mbongeni
one that sought to shake the to the assembly of solar panels. direction on matters of economic Ndlovu and Liesel Kassier.
foundations. For those harking The growing role for private policy. This was not one of those The views in this note do not
back to the expansive claims in investment in this space is already budget speeches. However, of necessarily reflect those of
budgets of Trevor Manuel, there taking hold and could further some concern, efforts to stimulate the Toyota Wessels Institute
was not much vision in this bolster demand for inputs as well the industrial base of the economy, of Manufacturing Studies
budget and certainly no poetry. as diversity energy supply options. whether through encouraging (TWIMS). During the year
foreign direct investment or
On the positive side, apart supporting local firm investment, TWIMS will convene a diversity SCAN
from the budget’s predictability, Infrastructure did not really feature. Perhaps of engagements, both on matters QR CODE
there was considerable attention The 2023 budget also highlighted the general thrust of President covered in the budget, and on TO SEE
paid to matters that exercise the efforts around some growth in Ramaphosa’s State of the Nation those left out. 
minds of people working in and levels of infrastructure spending, as Address was deemed sufficient a VIDEO
running businesses. modest as they might be. Beyond signal in this regard. www.twimsafrica.com

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