Finance Minister Tito Mboweni has revealed the financial pressure on the government in comments to the National Assembly.
The country needed to cut unnecessary expenditure ‘we thought we could afford and yet can’t afford’.
Speaking during the National Assembly debate on the 2020 Appropriations Bill, Mboweni said: ‘When we thought we were rich, we would do things in a way. We are no longer as rich as we use to think we are, and therefore we must adapt to the new situation. A new situation, in my view, requires that we think seriously about going to zero-based budgeting.
‘In other words, we refocus our attention on the strategic issues we can do, refocus our attention on the growth-enhancing activities and no longer take for granted that the baseline that was there last year, will always be the case going forward.’
Mboweni is to deliver an ‘emergency’ budget on 24 June to make provision for Covid-19 relief efforts.
Mboweni said: ‘Tax collection and revenue have declined very sharply. We therefore need to refocus our attention to what is now feasible and how we can help our people during this Covid-19 pandemic and still be able to support our economy going forward.
‘Most sectors of the South African economy are in dire straits. We are going to see a lot of continuities and discontinuities in the economy and we should stand ready to confront the new challenges that are before us.’
IOL reported that the South African Reserve Bank (SARB) expected the domestic economy to contract by 7% this year, predicting that the country would lose R285 billion (about US$16.7bn) in projected revenue.
Positive cases in South Africa rose to 61 927 (35 008 recoveries), with the toll rising by 70, to 1 354.
Health Minister Zweli Mkhize noted that TB and diabetes remained the leading causes of natural death in South Africa. Because Covid-19 was new and spreading fast, it was getting more attention.
‘Because it spreads very fast, it is really the one that causes lots of concern. The fact that today the whole world has more than seven million people affected and that in South Africa every day our numbers are increasing, and the fact that it has actually increased mortality in a number of countries, is the reason why everybody is anxious about it.’
But he added: ‘Tuberculosis has still (killed) more people, as well as diabetes and cardiovascular diseases, but because we have been used to these diseases and got treatment for them and we can cope with them, it doesn’t appear as if they are big issues, (when) actually they are.’
News24 reported that, according think tank Copenhagen Consensus Centre, about 450 000 people developed TB in South Africa annually, with 270 000 of those also living with HIV. With 89 000 deaths every year, TB remained the leading cause of death in South Africa.
Gauteng’s Education MEC Panyaza Lesufi was reported to be self-isolating after two staff members tested positive for Covid-19.
Gauteng Premier David Makhura said the province would decide in the next few days whether or not to support the call to reinstate the ban on alcohol.
He said: ‘The cumulative impact is something we can see, especially in the wards. We were happy that some of the wards were empty. Some are now filling up. When the discussion takes place there is no doubt that we will share the experience of Eastern Cape. We will say that we are deeply concerned. We have not yet come to the decision as Provincial Command Council that says alcohol should be completely banned. We have been dealing with the effect of it.’
Business Insider reported that the ban on cigarette sales had earned criminal syndicates at least R6 billion so far, according to estimates by Johann van Loggerenberg, author of Tobacco Wars.
He said the state earned about R1 billion a month in taxes on cigarettes. If most smokers had still found a way to buy cigarettes in over two months of lockdown, then the state had lost at least R2 billion in revenue. And because illegal cigarette prices were at least triple the normal cost, that meant that criminals had earned R6 billion from illegal cigarettes since the start of lockdown in March.
Van Loggerenberg said the ban was a ‘capitalist’s dream’, but there was ‘no question’ that transnational crime syndicates were involved. This was evident from brands now available in South Africa, from Mozambique, Angola, DRC and even China.