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Difficult trade-offs coming to keep South Africa afloat: report
The National Treasury has reported told president Cyril Ramaphosa that South Africa will have to hike value-added tax (VAT) by 1% or 2% if it wants to keep the R350 Social Relief of Distress (SRD) grant going.
According to the Sunday Times, this message was among many delivered at a top-level meeting called by the president this week, following the release of a Treasury memo to various departments warning of budget cuts.
South Africa has effectively hit its budget limit, with revenues not meeting the February budget expectations, while government spending has continued to balloon far beyond what was planned. To avoid financial collapse, sacrifices now have to be made.
On top of proposals to freeze hiring and new projects, new cost-cutting measures that have emerged in Treasury’s plan reportedly include cutting down the number of departments in government.
This has been a long-held intention of president Cyril Ramaphosa, who promised back in 2018 to slim down his cabinet.
Ironically, the president introduced two new ministers this year instead.
Difficult choices
While there has been a clear focus on direct cost-cutting, austerity measures are not popular among politicians and put a severe strain on electioneering tools ahead of an important national election in 2024.
Ramaphosa hinted earlier this week that he was not in favour of budget cuts, saying that they were “not necessarily” the answer to South Africa’s financial woes.
However, he was reportedly told at this week’s meeting that huge trade-offs would have to be made somewhere.
For instance, if the government wants to keep the popular R350 SRD grant going, it will need to raise R42 billion or R55 million if it is raised to R450. This would require VAT to be hiked by 1% or 2%, respectively, the Sunday Times reported.
The SRD grant, initially implemented to offer some relief to the multitude of jobless South Africans impacted by the Covid-19 pandemic, has been extended several times.
The current end date of the grant is March 2024, but the political reality is that the grant has become a de facto basic income grant for the unemployed, with around 8 million recipients. To kill the grant would be an incredibly unpopular move a huge risk ahead of the 2024 elections.
But the budget shortfall won’t be solved by one or two measures, with the Sunday Times listing a host of social and other programmes that would need to be shut down to save money.
Government was warned
Finance Minister Enoch Godgonwana warned in May that South Africa would need to make some significant trade-offs to address its fiscal challenges and restore public finances.
At the time, he warned that the ballooning government wage bill was the key concern.
Now, the Treasury sits with a much tighter budget, expanding government spending, and a growing debt problem where national debt is on track to hit R6 trillion by 2025.
Economist Dawie Roodt noted that the budget deficit is rooted in:
• The salary bill for civil servants being larger than budgeted because they received above-inflation increases. This is set to continue with an election year in 2024.
• The government gave more money to failing SOEs than expected. This will continue, especially with the state taking over a large part of Eskom’s debt.
• South Africa’s tax collections are under pressure because the economy is not growing.
• Income from mining is declining because of a downturn in the commodity cycle and problems with South Africa’s rail and port services.
“South Africa’s fiscal deficit for 2023 is set to be between 6% and 6.5% of gross domestic product (GDP), much higher than the minister’s expected 4%,” Roodt said.
He added that Godongwana said the government wants to stabilise South Africa’s debt level at 70% of GDP, but it has already increased to 72%.
The economist noted that the country only has four options to address the budget shortfall and the growing debt burdennone of which are easy or popular.
• Grow the economy. However, South Africa’s current macroeconomic policies will not lead to economic growth.
• Spend less money. However, spending less money on people is not politically palatable and, therefore, unlikely especially with elections around the corner in 2024.
• Increase taxes. However, the country already has an alarmingly narrow tax base, with 1.12% of taxpayers paying 30% of total personal income taxes and 4.4% of corporate taxpayers paying 95% of total corporate income taxes. If this increases, the tax base will collapse as many will simply leave.
• Privatise state-owned enterprises. The government can sell state-owned companies before they are worthless. However, this is also unlikely, as many public servants, unions, and politicians have a vested interest in SOEs.
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Govt responds to passport rushGovt responds to passport rush
GOVERNMENT has extended operating hours at the Civil Registry Department after its offices were flooded with desperate Zimbabweans applying for passports. Snaking queues have emerged at the Civil Registry Department offices countrywide after Finance minister Mthuli Ncube proposed an increase in passport fees beginning next month. Ncube said he would increase fees for an ordinary passport from US$120 to US$200, while an emergency travel document will be priced at US$300 up from US$200. V.5108
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06. Dec. 2023 BBC NewsCouples `devastated` by migration visa rule changes
Scientists Josie and Joan Ferrer Obiol says their dream of returning to the UK has been turned upside down Couples planning a new life in the UK have been left heartbroken by changes restricting who can apply to live here. From April 2024, British citizens or people already settled in the UK will need to show they earn £38,700 before their overseas partner can live here with them - a sharp jump from the current threshold of £18,600. They also still need to show they are in a marriage or civil partnership when they apply for a family visa, intend to be within six months, or that they have been living together for at least two years. V.5109
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06. Dec. 2023 SABCSouth Africa is first African country added to Saudi Arabia’s e-visa
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05. Dec. 2023 France24UK announces limits on regular migration as it tries to turn polls around
London (AFP) Britain`s embattled Conservative government unveiled a raft of measures Monday aimed at cracking down on record levels of migration a key battleground in a general election expected next year. Home Secretary James Cleverly unveiled proposals to cut regular migration. The UK announced it would raise the minimum salary threshold for a skilled worker visa and prevent overseas health and social care staff from bringing family dependents to Britain. V.5106
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05. Dec. 2023 News24Foreign parents: Constitutional Court declares parts of Immigration Act unconstitutional
The Constitutional Court has ruled that parts of the Immigration Act are unconstitutional. • The Constitutional Court has declared sections of the Immigration Act invalid and unconstitutional as they discriminate against foreign divorced and separated parents. • According to the act, a foreigner on a spousal visa must leave the country when their relationship with a South African ends, even if they have children together. • The court gave Parliament 24 months to make the necessary amendments to the act, so it is consistent with the Constitution. V.5107
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04. Dec. 2023 Pro Bono & Human RightsThe right to apply for asylum in South Africa
The Constitutional Court (CC) recently handed down an important judgment which speaks to the right to apply for asylum in South Africa. Over the past several years, we have seen more and more anti-foreign national rhetoric in the public domain, with even high-ranking government officials contributing to the narrative that foreign nationals are the cause of many of South Africa’s issues. This has resulted in a continuingly shrinking safe space for foreign nationals who intend on seeking refuge in the country. Given our current socio-political climate, this judgment comes at a critical time where the rights of vulnerable people must be protected, in line with our international and domestic obligations. At a glance. V.5100
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04. Dec. 2023 News24Sting operation prevents 443 Zimbabwean children being trafficked into South Africa, says home affairs
42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • On Saturday evening, 42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • According to home affairs, 443 unaccompanied minor children were found on the buses. • It is alleged that the children were being trafficked into South Africa. The Border Management Authority (BMA) at the Beitbridge border post has stopped more than 40 buses carrying about 440 unaccompanied children, who were allegedly being trafficked into South Africa. V.5101
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04. Dec. 2023 News24Sting operation prevents 443 Zimbabwean children being trafficked into South Africa, says home affairs
42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • On Saturday evening, 42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • According to home affairs, 443 unaccompanied minor children were found on the buses. • It is alleged that the children were being trafficked into South Africa. The Border Management Authority (BMA) at the Beitbridge border post has stopped more than 40 buses carrying about 440 unaccompanied children, who were allegedly being trafficked into South Africa. V.5102
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04. Dec. 2023 News24Sting operation prevents 443 Zimbabwean children being trafficked into South Africa, says home affairs
42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • On Saturday evening, 42 buses from Zimbabwe were stopped and searched at the Beitbridge border post. • According to home affairs, 443 unaccompanied minor children were found on the buses. • It is alleged that the children were being trafficked into South Africa. V.5103
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04. Dec. 2023 Immigration TorontoExploring Canada`s rental cost, Most and least expensive cities
Each year, Canada attracts numerous international students who enter the country by obtaining study visas and permits. These students are required to adhere to specific conditions throughout their academic journey. One crucial aspect that international students often consider is Canada’s rental cost. One major issue affecting international students’ entire experience in Canada is the expense of renting. It is crucial that they comprehend and budget for the costs related to housing while they are studying in the nation. Furthermore, international students looking for accommodation in Canada may make better decisions if they are aware of the rental circumstances and market trends. V.5104
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04. Dec. 2023 SA MigrationProtection of asylum seekers and of children facing lifelong statelessness highlighted in two significant South African decisions, case note extracts
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29. Nov. 2023 Global MigrationLatest updates in global immigration
This week, the Global Immigration team at Smith Stone Walters would like to highlight the following recent updates from Australia, Denmark, Hong Kong, Israel, the Netherlands, Sweden, Switzerland and the United States. Australia: Start date set for permanent residence changes The Department of Home Affairs has set a start date of 25 November 2023 (subject to the approval of regulation changes) for its previously announced changes to the employer-sponsored permanent residence programme. From that date, all Temporary Skill Shortage (TSS) (subclass 482) visa holders will be able to access permanent residence via the Temporary Residence Transition (TRT) stream of the Employer Nominated Scheme (ENS) (subclass 186) visa. V.5098
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29. Nov. 2023 Associated Australian PressHome affairs boss Pezzullo sacked after leaked texts
Mike Pezzullo has been sacked as head of the home affairs department after a code of conduct breach finding. Mr Pezzullo was stood down after leaked messages revealed the secretary repeatedly inserted himself into the political process. The governor-general in council terminated his appointment on Monday. The texts revealed he lobbied for his department and pushed his personal views, in breach of public service standards, across a five-year period. It is not suggested the messages show corrupt or illegal conduct. Home Affairs Minister Clare O`Neil referred the matter to the Australian Public Service Commissioner after concerns were raised following media reporting of the messages. V.5099
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28. Nov. 2023 Associated Australian PressHome affairs boss Pezzullo sacked after leaked texts
Mike Pezzullo has been sacked as head of the home affairs department after a code of conduct breach finding. Mr Pezzullo was stood down after leaked messages revealed the secretary repeatedly inserted himself into the political process. The governor-general in council terminated his appointment on Monday. The texts revealed he lobbied for his department and pushed his personal views, in breach of public service standards, across a five-year period. It is not suggested the messages show corrupt or illegal conduct. V.5097
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27. Nov. 2023 Digital JourneyIndia Provides Enhanced Online Visa Access to Citizens of South Africa, Switzerland, New Zealand, and Bulgaria
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23. Nov. 2023 The SowetanSham doctor case leads police to fake identity syndicate within home affairs
The NPA is waitng on Interpol results on Kingsley Chele`s identity verification. More than 370 fraudulent documents issued by public servants An investigation into the two identity documents belonging to bogus doctor Kingsley Leeto Chele led to police cracking an alleged syndicate involving home affairs officials who are accused of selling documents to illegal immigrants. A source close to the investigations has revealed how the syndicate had issued over 370 fraudulent documents and had been charging more than R2,000 per applicant. V.5092
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23. Nov. 2023 News24How much does a tourist visa cost for the UK, USA, Australia, and most Schengen Zone countries?
The visa application process in South Africa includes a load of paperwork, appointments made way in advance and a heavy fee. Getty Images • South Africa has one of the world`s `weakest` passports. • This means we often need to buy pricey visas to visit foreign countries. • Here`s how much you`ll pay for several popular tourist visas and how long they take to process. V.5093
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23. Nov. 2023 iolCape Town woman allowed to emigrate with her two children to live in Dubai with US fiancé
relocate to Dubai with her children where they will be living with her American fiancé. The woman was married and got divorced from the father of her children in January 2016. The children were eight and three when their parents divorced. At the time of the divorce, both parties lived in Durban. In March 2019, the woman relocated with the children to Cape Town. The father would visit the children and sometimes they would visit him. In 2020, she started dating GJ, an American citizen. She said for almost two years, they have been living together with GJ as a family. V.5094
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23. Nov. 2023 BusinesstechReverse emigration twist for South Africa
Although many wealthy South Africans are packing their bags for the UK, new migration data shows that the inverse is also true. The latest Wealth Migration Report 2023 from Henley & Partners and New World Wealth shows that around 400 High Net-Worth Individuals (HNWIs) those with a net worth of over US$1 million (roughly R18 million) emigrated out of South Africa in 2022 with a further 500 leaving the country in 2023. The UK is an emigration hotspot for South Africans with the 2021 UK census noting that over 215,000 South Africans live on the island. V.5095
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22. Nov. 2023 Human Rights WatchSouth Africa Mulls Major Immigration Overhaul
Migration may be an increasingly contentious issue in South Africa, but that does not justify taking an axe to refugee rights and chipping away at the country’s commitments under the United Nations’ 1951 Refugee Convention, as the Department of Home Affairs (DHA) recently proposed alongside other immigration reforms. V.5088
