The National Assembly (NA) and National Council of Provinces (NCOP) have approved the 2022 Fiscal Framework and Revenue Proposals during separate plenary sittings of both Houses on Wednesday.
The Fiscal Framework and Revenue Proposals are part of the 2022 annual national budget, and were tabled before the National Assembly by Finance Minister, Enoch Godongwana, on 23 February 2022.
The framework was tabled in terms of Section 27 of the Public Finance Management Act, Act No. 1 of 1999 and Section 7 (1) of the Money Bills Amendment Procedure and Related Matters Act, Act No. 9 of 2009.
The Fiscal Framework is for a specific financial year and gives effect to the national executive's macro-economic policy.
It includes a range of issues, including estimates of all revenue -- budgetary and extra-budgetary specified separately -- expected to be raised during that financial year and forecasts of borrowing for that financial year.
Parliamentary spokesperson, Moloto Mothapo, said Parliament's agreement to the Fiscal Framework and Revenue Proposals follows a series of joint meetings of the Finance and Appropriations Committees of both Houses of Parliament, with Godongwana, the Director-General of National Treasury and senior National Treasury officials, as well as public consultations.
Mothapo said the budget presented by the Minister is not final, but a proposal that Parliament must scrutinise and approve.
“The process ensures that Parliament plays its crucial oversight role over the executive. Parliament's Select and Standing Committees on Finance also held public hearings and received submissions from a wide range of organisations.
“These include the Congress of South African Trade Unions, the South African Institute of Chartered Accountants, the South African Institute of Tax Professionals, PricewaterhouseCoopers, the Healthy Living Alliance, South African Breweries, Institute for Economic Justice, as well as the Woman on Farms Project,” Mothapo explained.
The report, said Mothapo, states that stakeholders generally supported the 2022 Budget, particularly government's continued commitment to consolidating public finances, while supporting the pandemic response, job creation, social protection and tax relief.
However, Mothapo said some stakeholders said government's continued fiscal consolidation path is not sustainable and it comes at the expense of the well-being of the people of South Africa, and does not adequately address the fundamental crisis facing workers.
“Additionally, there were conflicting views on the proposed reduction of the Corporate Income Tax. The committees made several observations and recommendations.
“They welcomed and acknowledged that the national budget strikes a difficult balance between growing the economy, ensuring fiscal sustainability, maintaining expenditure over the medium term and providing tax relief to individuals, including companies,” Mothapo said.
He said the committees expressed concern about the looming fiscal risks.
They noted that the expected Gross Domestic Product (GDP) growth of 1.8% over the medium-term, on average, would not be sufficient to reduce poverty, inequality and the high unemployment rate.
“The committees further raised concerns about the structural constraints that have reduced the potential economic growth for the past decade and remain an obstacle to recovery. The committees recommended the speedy and practical implementation of economic reforms to increase job creation and reduce inequalities.
“They urged National Treasury to provide quarterly feedback on structural reforms and management of the electricity crisis that negatively impacted consumers and SMMEs.
“Furthermore, the committees also recommended the appearance of the Tax Ombudsman in the second quarter to respond to issues raised by stakeholders. They further called for the Public Procurement Bill to be brought to Parliament for National Treasury to address the legal and other challenges affecting this Bill,” Mothapo said. – SAnews.gov.za
