Unemployment, Eskom, should be focus of budget speech

2019-10-22 15:03

The state of Eskom, concerns around tax revenue and the dire unemployment crisis are just some of the issues Finance Minister Tito Mboweni is expected to address during his mid-term budget speech next week.

This is according to a survey conducted by the South African Citizens Survey (Sacs), which revealed that: “South Africans are concerned about Eskom, and therefore it is likely that Mboweni will address this in his speech.”

According to the marketing and social research consultancy, “the public’s trust in Eskom declined from 56% in January to a low of 35% in April this year as a consequence of Eskom implementing load shedding in February and March.”

Sacs also revealed that between April and July, trust in Eskom went up from 35% to 55%, due to a lull in load-shedding, a sentiment that could decline after the state-owned entity last week returned to “stage two” load shedding, due to “losing Medupi Power Station’s units 3, 4 and 5 due to coal and ash handling issue”.

“Eskom is one of the biggest issues facing South Africa. What we observed was that trust in the organisation has been on the decrease,” said Reza Omar, strategic research director at Citizen Surveys.

The public’s trust in Eskom declined from 56% in January to a low of 35% in April 2019 as the consequence of Eskom implementing load shedding in February and March. Graphic: Citizen Surveys

“Although there was an increase in trust for a period of time, on July 23 Minister Mboweni tabled a special appropriation bill to provide an additional R59 billion to bail out Eskom over the next two years. As a result, we saw August’s trust in Eskom drop to 45% as South Africans were told to foot the bill.”

Omar explained that following Mboweni’s February budget speech, and in anticipation of the minister’s speech next week, his organisation conducted a survey to determine what some of the prominent issues South Africans were facing were and what they wanted Mboweni to address.

Read: Here’s how the Eskom bailout will hike the budget deficit

He explained: “We asked a representative sample of 1300 South Africans who are 18 years and older from across the country the question: In your opinion what are the three most important issues the minister is expected to address? Eskom, the issue of tax and unemployment stood out.”

The data shows that 78% of adult South Africans believe that unemployment is the biggest issue facing the country – a growth of 5% from Q2 2019. This is followed by crime, which has grown from 29% in Q2 to 39% in Q3.

According to Sacs, South Africans will also be expecting Mboweni to address concerns around tax revenue because data from the survey revealed that the trust in the South African Revenue Service is currently on a decline’.

Trust in SARS declined by 3% in Q3 of 2019 after reaching a twelve-month high in Q2. Graphic: Citizen Surveys

“We asked respondents if they thought that withholding tax payments is a legitimate form of protest against the government. 64% disagreed stating that it’s “wrong and that those who do should be punished under law”, however 23% sympathised with those who refuses to pay and about 10% stated they would also do so if they had the chance, more than doubling since the beginning of 2018.

Trust in the revenue service declined by 3% in Q3 2019 after reaching a 12-month high in Q2.

Read: SA’s economic paralysis is a leadership crisis

According to Sacs “Mboweni’s favourability rating has been declining significantly from 35% in June to 29% in July, followed by a further drop to 26% in August.”

“He has a difficult path ahead. If he wants to forge the path to long-term growth, he will need to pay attention to the issues that are truly important to South Africans at present,”

The consultancy firm added that: “despite President Cyril Ramaphosa’s high profile courting of investors to kick-start the economy, South Africans are expecting immediate and tangible feedback on the ANC’s growth plan from Mboweni.”

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May 24 2020