SA opposes banking levy: Gordhan

Pretoria - Minister of Finance Pravin Gordhan has shown government's hand on the contentious issue of a proposed global banking tax and higher liquidity requirements, saying South Africa will not support a uniform levy across the world or measures that are unfriendly to some countries.

Speaking in Pretoria ahead of a key G20 meeting in Toronto this weekend, Gordhan said the meeting is a crucial one as global responses to the financial crisis have become less coordinated, with individual interests starting to dominate again. On what will likely be a heated debate around currencies, he said the key was to ensure balance in the currency market.

Gordhan said South Africa had raised the banking issues with the financial stability board and has requested an appropriate system which provides country-friendly measures within the global framework.

It has been said South African banks could be short of as much as R600bn if proposed liquidity measures are implemented - and these together with higher capital requirements and levies will lead to lower lending in an economy desperate to grow its infrastructure.

Gordhan said South Africa should not be punished as the country did not create, cause or deepen the financial crisis.

"SA will be encouraging everyone to work together to move to a cohesive framework," he said.

Gordhan added South Africa and Canada were not in favour of a global banking tax as their systems were stable. A proposed bank levy need not be uniform, but there could certainly be levels of cooperation in other areas.

On the currency debate, he said while certain players are saying they did not want their currencies to appreciate too much or become too volatile or uncompetitive, this was true for everyone. The key would be to come to a coordinated pact and ensure all currencies are at levels allowing each country to be competitive on a global scale.

"We must find win-win formulae that satisfy everyone and not just some people," he said.

Gordhan feels the 2010 FIFA World Cup will help bring Africa to the fore on the global stage, with the ability to host this event improving confidence. But he added that fiscal consolidation is key and a balanced approach to fiscal spending must still ensure the growth-friendly elements of any global plans are not sacrificed.

Gordhan noted SA's unemployment stats released on Tuesday "are depressing to say the least" - they showed the country added to the 870 000 formal and non-formal sector jobs lost in 2009 by another 79 000 formal jobs in the first quarter.

"The level of job creation must improve phenomenally," he said, pointing out that the problem of 75% of young people being without jobs was serious. Gordhan said harder work is called for by all stakeholders to help improve the situation.

"Job creation and poverty alleviation must be at the centre of discussions - it will be one of the key challenges at the G20," he said.