Budget breaks President Ramaphosa’s promise, say economists

The document is a formal recommendation from a group of economists to the South African Parliament to reject the Supplementary Budget tabled on 24 June 2020. The authors argue that the budget contradicts President Ramaphosa's R500 billion rescue package by reducing government expenditure by R230 billion over two years and relying on the reprioritisation of existing funds rather than providing new spending. They highlight significant shortfalls in social security, job protection, and health, while noting dangerous cuts to basic education, higher education, and energy transition programmes. The economists suggest alternative financing methods, such as solidarity taxation and increased borrowing, to prevent a catastrophic economic crisis.

• The Supplementary Budget fails to implement the R500 billion rescue package announced on 21 April 2020, providing a net increase to non-interest spending of only R36 billion for the current year. Of the R145 billion targeted for Covid-19 expenditure, R109 billion is sourced from reprioritisations and the suspension of baseline allocations.
• The budget significantly underfunds key pillars of the rescue package: social security received R41 billion (with only R25 billion in new spend) against a promised R50 billion; job protection and creation received only 6% of the promised R100 billion for 2020/21; and health received only R2.9 billion in net new funds despite a R21.5 billion allocation.
• The budget reduces planned expenditure by R230 billion over two years, including cuts to critical sectors: R2.1 billion from basic education, nearly R10 billion from higher education and training, R4.6 billion from transport, and R1.5 billion from the Department of Mineral Resources and Energy's programme for non-grid energy solutions and renewable transition.
• The authors argue that the budget's new spending constitutes less than 1% of GDP, far below the 10% of GDP target originally lauded by the National Treasury for the rescue package.
• The economists propose that the crisis should be managed through increased expenditure financed by a combination of reserve bank action, mobilising domestic quasi-public funds, increased borrowing, and solidarity taxation.

APA

Isaacs, G., Lehohla, P., Monaco, L., Swilling, M., Sibeko, B., Mondi, L., Cattaneo, N., Coleman, N., Padayachee, V., Maredza, Fine, B., Brooks, L., Sishi, M., Posel, D., Pons-Vignon, N., Adelzadeh, A., Frye, I., Knox, S., Sender, J., ... Callaghan, C. (2020). Budget breaks President Ramaphosa’s promise, say economists. Institute for Economic Justice. https://iej.org.za/press-room/in-the-media/budget-breaks-president-ramaphosas-promise-say-economists/

Chicago

Isaacs, Gilad, Pali Lehohla, Lorenza Monaco, Mark Swilling, Busi Sibeko, Lumkile Mondi, Niki Cattaneo, et al. Budget breaks President Ramaphosa’s promise, say economists. Institute for Economic Justice, 2020. https://iej.org.za/press-room/in-the-media/budget-breaks-president-ramaphosas-promise-say-economists/.

Wikipedia

{{cite press release |last1=Isaacs |first1=Gilad |last2=Lehohla |first2=Pali |last3=Monaco |first3=Lorenza |last4=Swilling |first4=Mark |last5=Sibeko |first5=Busi |last6=Mondi |first6=Lumkile |last7=Cattaneo |first7=Niki |last8=Coleman |first8=Neil |last9=Padayachee |first9=Vishnu |display-authors=etal |title=Budget breaks President Ramaphosa’s promise, say economists |publisher=Institute for Economic Justice |date=1 July 2020 |url=https://iej.org.za/press-room/in-the-media/budget-breaks-president-ramaphosas-promise-say-economists/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{isaacs2020budget, author = {Isaacs, Gilad and Lehohla, Pali and Monaco, Lorenza and Swilling, Mark and Sibeko, Busi and Mondi, Lumkile and Cattaneo, Niki and Coleman, Neil and Padayachee, Vishnu and Maredza and Fine, Ben and Brooks, Laura and Sishi, Mandlakapheli and Posel, Dori and Pons-Vignon, Nicolas and Adelzadeh, Asghar and Frye, Isobel and Knox, Sacha and Sender, John and Nkosi, Redge and Kalla, Shaeera and Freund, Bill and Jinabhai, Nikhil and Hall, Ruth and Nkunzi, Sibulele and Budlender, Joshua and Bassier, Ihsaan and Ameen, Nasreen and Zerihun, Mulatu F. and Kean, George and Baloyi, Basani and Callaghan, Chris}, title = {{Budget breaks President Ramaphosa’s promise, say economists}}, publisher = {Institute for Economic Justice}, year = {2020}, month = jul, url = {https://iej.org.za/press-room/in-the-media/budget-breaks-president-ramaphosas-promise-say-economists/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }