THE impact of the COVID-19 lockdown on an economy already in difficulties may call for ‘zero-based budgeting”, said Fin24 citing the comments of South African finance minister, Tito Mboweni.
“We must start from scratch,” said Mboweni in Parliament today ahead of the ’emergency budget’ which has been set down for June 24. In the new budget, the South African government will have to prioritise infrastructure and growth enhancing measures. This means reducing expenditure that is not required, said Fin24.
“We need to refocus our attention to what is now feasible and how we can help people in the COVID-19 pandemic, and still be able to support the economy going forward,” said Mboweni. “We are no longer as rich as we used to think we are.
“We need to adapt to a new situation.”
Consultancy Deloitte described zero-based budgeting as allocating funding based on programme efficiency and necessity, and not budget history. Each expenditure item needs to be justified, said Fin24. “We cannot take for granted the baseline we had last year, will always be the case going forward,” Mboweni said.
The South African Revenue Service has forecast tax revenue for the year of R285bn less than the budget estimate, said BusinessLive in a report.
Mboweni is also expected to table The Special Appropriation Bill on June 24 which will reflect the R130bn restructuring of budgets by departments to fund government’s R500bn COVID-19 relief package. The Special Appropriation Bill will overtake the Appropriation Bill related to February’s budget which had earlier recommended a rejig of the country’s finances in order to overcome economic challenges.