Zero-rating food items not an option – Godongwana

FINANCE Minister Enoch Godongwana says he is not considering zero-rating certain food items to cushion the poor due to the rising cost of living.

Godongwana said that at this stage the Budget is not in a position to fund anything outside of what was presented in February.

Godongwana, who was part of the Economics Cluster of ministers answering oral questions in the National Assembly this week, said many programmes of the government were supporting the poor.

He said the government was already funding its indigent policy with R70 billion.

He said the funds that have been allocated in the Budget would be able to address key programmes of the state.

Members of the National Assembly wanted to know if the government would take measures to cushion the poor by zero-rating some food items.

Godongwana said a committee was set up by the National Treasury some time ago to look at this.

He said it made several proposals. Godongwana did not outline the proposals.

However, he said the state has no financial resources to zero-rate certain food products.

“When you table a Budget, you ask yourself a couple of questions. How much can the economy afford? The capacity to service debt depends on how the economy is performing. Is our economy performing in such a manner that I can’t fund everything on earth?

“What we are talking about is not an unwillingness to address the issue of poverty. It’s the ability of the resources we have to be able to deliver on everything.

“Somebody was saying, ‘why don’t you cut the fuel levy’. I don’t like it. I have said it. But I will tell you the following. If I were to withdraw it today I am taking R90 billion out of the system. How am I going to deal with that question? It’s the affordability issue,” said Godongwana.

He said this question has been raised several times in Parliament by different political parties and the National Treasury had set up a committee to look at it.

“When Covid-19 started this issue was also raised in Parliament. For the last few years it has been raised during discussions and deliberations on the Budget by standing and appropriations committees on finance in both Houses of Parliament.”

However, at the end of the day it was about whether the state has enough resources.

Godongwana said there was no money to fund the zero-rating of items.