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SONA 2019 - A Short Summary

Posted 23 July 2019 under TaxTim's Blog


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On 20 June 2019, President Cyril Ramaphosa delivered his first State of the Nation Address (SONA) of the sixth parliament, and for the first time in years, we witnessed an uninterrupted SONA. And that is not the only first. For the first time, the SONA cost almost R2m, a staggering 47% lower than the cost of SONA 2018 and the lowest in five years.

We understand that many people didn’t have 80 minutes to spare, to sit and watch SONA 2019, so we’ve summed up some of the key points that President Ramaphosa made in his speech.

#DataMustFall

In a necessary turn of events, President Ramaphosa heard the cries of many young people in South Africa, which speaks volumes to the party which is often seen as anti-youth. More than simply echoing young people’s requests, the President also deduced that reducing the cost of data would help to bring young people closer to employment opportunities. “This is a vital part of bringing down the costs of data, which is essential both for economic development and for unleashing opportunities for young people,” said President Ramaphosa. With this essential understanding, Ramaphosa has called on telecommunication giants within the country to get on board and bring down the cost of data, in order to be in line with other countries. The Minister of Communications, Stella Ndabeni-Abrahams, would issue a policy direction to Icasa.

Eskom

President Ramaphosa explained that the country’s power utility has just enough money to last until October this year. With that being said, a special appropriation bill has been tabled to allocate a bailout of R230bn to help support Eskom over the next 10 years. Ramaphosa conceded that Eskom is a vital part of the economy, and the current mismanagement of the State-owned Enterprise (SOE) is one of the main reasons for the country’s lacklustre economic performance. He explained how loadshedding, coupled with the uncertainty of the nation’s power supply, has resulted in a stifling economy.

Unemployment

More than half of the country’s population of young people are unemployed. Unemployment is yet another contributing factor to South Africa’s failing economy. The President has rightfully dubbed unemployment as a national crisis. As a solution to this problem, President Ramaphosa declared that government departments, and all three tiers of government (national, provincial and local) would work in partnership with the private sector to connect unemployed young people to job opportunities. This power partnership will aid young people in signalling their availability to potential employers, as well as helping them identify self-employment opportunities. President Ramaphosa has made it clear that there is a particular emphasis on empowering women and youth from poorer households by helping them gain access to opportunities. President Ramaphosa has secured a whopping R840bn in funding in aid of creating an optimistic 2 million jobs by the year 2020.

Land reform

To be frank, the President was rather vague on his approach to expropriation without compensation, which one of the leading opposition parties, the EFF (Economic Freedom Fighters) was waiting to hear. In parliament, President Ramaphosa promised to accelerate the process of providing housing and land that are “well-located”, as well as introducing a “clear property rights regime”. The President carefully selected his words and purposefully steered away from mentioning expropriation without compensation. Instead, President Ramaphosa mentioned that a report has been received from the Presidential Advisory Panel on Land Reform and Agriculture, which is to be presented to Cabinet. According to the President, “The panel’s recommendations will inform the finalisation of a comprehensive, far-reaching and transformative land reform programme. In the immediate term, government will accelerate efforts to identify and release public land that is suitable for urban settlements and for farming”.

 

 

 



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