Budget 2023
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Gordhan on why he can't cut Zuma Cabinet

Cape Town - The developed world should regard developing countries such as those in Africa as their partners and stop reacting rashly when the US Federal Reserve changes course, said Finance Minister Pravin Gordhan.

SEE INFOGRAPHIC: All your 2016 tax tables

He spoke at a breakfast in Cape Town which was jointly hosted by eNCA and SABC, following the delivery of his Budget Speech in parliament on Wednesday.

In response to a question from German Ambassador Walter Lindner about what his message to foreign investors should be, Gordhan said: “Africa is uncharted territory and South Africa specifically has the most sophisticated business infrastructure on the continent.

SEE INFOGRAPHIC: Overview of Gordhan's Budget Speech

“Yes, there are problems with connectivity, but we want to discourage the developed world to cause so many ebbs and flows in emerging markets. Things keep changing and your capital inflow and outflow hurt developing countries.”

Cas Coovadia, managing director of the Banking Association of South Africa, asked Gordhan if he has the necessary support from the rest of government for the budget he proposed, especially where state-owned enterprises are concerned.  

“Minister, it’s a tough environment in which you had to draft the budget and reaction from the business sector was very positive. But government also needs to get behind this budget and take the hard decisions to implement the plans.” He asked Gordhan if privatisation of SOEs is an option at all.

Gordhan did not answer the question directly, but said: “Privatisation has become a deadly word in South Africa, as there’s a view that state assets should be utilised for developmental purposes.

“In nominal terms that’s fine, but we find ourselves in an environment where we just don’t have enough money to give, say, R3bn to SAA. That’s why we need to bring multiple brands (in SOEs) together and merge boards. We need to mobilise all the capital we can get. And apologies to those who make their money sitting on boards.”

'I'll be fired if I say anything about cabinet size'

Leanne Manas, SABC Morning Live presenter, asked Gordhan to respond to some viewers’ questions about the size of President Jacob Zuma’s cabinet and the burden it puts on the economy.

“The finance minister will be fired if he says anything about the size of the cabinet,” Gordhan quipped. “I can’t comment on that. Constitutionally that is the president’s prerogative. If you actually look at the numbers, it (the cabinet) doesn’t cost billions of rands. But having two houses (in Cape Town and Pretoria) does.”

WATCH: Former finance minister Trevor Manuel has praised Pravin Gordhan for taking up the challenge and delivering a budget two months after his reappointment at Treasury

* Visit our special issue on Pravin Gordhan's 2016 Budget Speech.

Everything you need to know about Pravin Gordhan's budget speech:

 Budget in a nutshell

 Calculate how much you will save on tax

 WATCH: Budget in under 5 minutes

 Calculate how much you will pay in sin taxes

 The secret's out - SA to get a sugar tax

 Budget 2016: Full speech

 R16bn more over medium term for higher education

 Gordhan takes swipe at Eskom over tariff hikes

 Gordhan's budget responds to the drought

 Tax targeting rich

     

ALSO WATCH: Politicians were quick to give their feedback on Finance Minister Pravin Gordhan's budget. This is what they said:

ALSO WATCH: Finance Minister Pravin Gordhan spoke to Fin24 just after delivering his budget speech in Parliament:

WATCH: If Treasury decided to simply hike VAT in a callous manner, it could have damaged the economy and its ability to grow, says Finance deputy minister Mcebisi Jonas

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