Cape Town -
The minister of finance is apparently not at one with the minister of economic development about the latest plans for private pension funds.
Minister of Economic Development Ebrahim Patel wants 5% of private pension funds' money to be invested in projects that promote government's development objectives.
But in a written response to a parliamentary question, Finance Minister Pravin Gordhan on Monday indicated that Patel's development bond proposal - involving private retirement funds and the Public Investment Corporation (PIC) in development finance - had not been tabled.
Deep and liquid domestic financial markets have strengthened over the past decade and currently ensure the availability of money to fund government's debt levels, said Gordhan.
Dion George of the Democratic Alliance, who asked the question in parliament, wanted to know what financial vehicle would be used to finance Patel's proposal and whether bonds such as these would escalate state indebtedness.
Gordhan responded that any increased state indebtedness resulting from instruments such as these lay outside the fiscal framework for the next three years, and had not been planned for.
In terms of Patel's strategic plan tabled in March, this proposal must receive attention within the next three years.
George told Sake24 that a rift between the two ministers was evident.
Gordhan's response shows that Patel in no way participates in decisions relating to public money, said George.
But a government source who wishes to remain anonymous denies dissension between the two ministers.
In addition, National Treasury spokesperson Lindani Mbunyuza has stressed that her department is continually in discussion with all departments, including the department of economic development, and it at all times considers all funding options for government's development needs.
On Monday evening National Treasury and the department of economic development issued a joint statement to say that media reports regarding Gordhan's parliamentary response has been based on an obvious misunderstanding.
However, the statement did not explain the nature of the misunderstanding.
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