National Treasury will in the coming weeks introduce Bounce Back measures to assist with the rollout of rooftop solar for households to encourage electricity generation and expand the renewable energy tax incentive for business.
Finance Minister Enoch Godongwana said this on Tuesday in Parliament where he tabled the department’s Budget Vote for the 2023/24 financial year.
The Minister said his published draft taxation legislative amendments for public comment to give effect to the two renewable energy tax incentives announced in the 2023 Budget.
He said these proposals will assist in partially addressing the country’s energy crisis and encourage private investment into expanding electricity generation.
“As a complementary measure, National Treasury has also made changes to the Bounce Back Loan Guarantee Scheme (introduced in 2022) to incentivise rooftop solar investments, with the aim to reduce energy-related constraints experienced by small and medium enterprises.
“Specifically, government will guarantee solar-related loans for small and medium enterprises on a 20% first-loss basis, as well as facilitate the leasing of rooftop solar by households and SMEs. The Bounce Back measures will be introduced in the coming weeks,” the Minister said.
Godongwana said these are among a suite of reforms that National Treasury has championed as part of Operation Vulindlela.
In addition to securing energy supply, he said, the joint operation with the Presidency also aims to ensure sustainable water supply, establish a competitive logistics network, improve digital communications, and reform the visa regime.
Overall, he said, over half of the reforms are either completed or on track to be completed within the next 12 months.
“We are also taking strategic action to secure our long-term growth prospects. There are no silver bullets or easy solutions to our economic challenges. What is needed is for us as a department, as a government, and as a nation, to make the difficult and informed trade-offs necessary to revive our economy,” he said.
Navigating uncertainty
Godongwana told MPs that the department’s sustained efforts to narrow the budget deficit are key to stabilising the debt-to-GDP ratio, investment in infrastructure, strengthening public sector financial management, overall governance and compliance.
“We also remain committed to navigating the difficult domestic and global economic conditions through stable, balanced and clear policies that support faster growth and address emerging fiscal risks.
“We have responded to the electricity crisis by taking over R254 billion of Eskom’s debt, to ease pressure on the company’s balance sheet, and enable it to invest in transmission and distribution infrastructure, while conducting the maintenance essential to improving the availability of electricity.”
Godongwana said the conditional write-off of the debt owed to Eskom by municipalities is another urgent step they have taken to stabilise the energy sector.
“At the time of tabling the Budget, we made an undertaking to publish details for accessing the debt relief in a circular. National Treasury has fulfilled this through the issuing of a municipal circular published on 3 May 2023.
“This enables municipalities to have some of their past debt to Eskom written off subject to tough conditions, including to change non-payment behaviour and start paying their bills to Eskom each and every month,” Godongwana said.
Streamlining procurement and transforming the economy
Cabinet has approved the Public Procurement Bill, which Godongwana hopes to table in Parliament soon.
The Bill is aimed at ensuring that the procurement system is modernised to provide value for money to the State, and to also leverage the system with the aim of advancing economic opportunities for historically disadvantaged people, women, young people, people with disabilities and small businesses, and to stimulate local production where feasible.
The proposed legislation also takes into account recommendations of the Zondo Commission, and aims to better prevent corruption, collusion and bid-rigging in public procurement by establishing a central procurement authority and procurement oversight bodies.
Supporting employment
Godongwana has reaffirmed Treasury’s commitment to supporting the millions of South Africans, especially young people, who are unemployed to access the job market and acquire the necessary skills to allow them to meaningfully participate in the formal economy.
“Through the Employment Tax Incentive, a cost-sharing mechanism between government and employers allowing them to reduce what they pay in tax when hiring young people, we are encouraging youth employment.
“Similarly, the Jobs Fund has concluded nine funding rounds, including the COVID-19 relief support funding round. As at 31 March 2022, the fund had disbursed R6.1 billion and leveraged an additional R11.9 billion from project partners,” he said. – SAnews.gov.za
