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NHLANHLA Nene might not be the most popular minister around after his maiden budget performance, but he certainly proved in the Medium Term Budget Policy Statement (MTBPS) tabled in parliament that he is acutely aware of economic realities.
READ: Budget in a nutshell
And most importantly, his solutions seem to be based on traditionally sound austerity measures and not ideological preferences. It augurs well for the future.
That said, the MTBPS or mini budget is just a policy statement with broad estimations. Clarity and detail on many aspects - like raising taxes, an important part of his solution - will only be given in next February’s national budget.
As he rightly points out, South Africa has reached a turning point. Economic realities do not look good, and we have to change course. As he puts it, “we have to be steadfast in our resolve to do more, together, with less".
His emphasis on maintaining core government services and focusing on public spending, promoting growth and an environment conducive to greater private sector investment is very positive.
READ: Mini budget to promote business growth
His statement that we must move from consumption to investment-driven economic growth is also worth a cheer.
But being hawkish in speeches and budget statements might not be enough. Huge problems regarding state-owned entities like Eskom, South African Airways, etc still exist and it might not be enough to just say they will be helped in a way that will not influence the budget deficit. In other words, taxpayers won't be asked to pay for rescue packages.
His solution for most of his financing problems at the moment seems to be the private sector. One just hopes he does not follow the common pattern that has often surfaced over the years among ANC politicians in their attitude towards business, the farmers and investors - that of making life very difficult for them, but then when things start to fall apart, running to them for rescue.
The private sector is no milking cow and will never be – it needs green pastures or otherwise it will just stop giving milk.
In this regard, South Africans will anxiously await next February to see what the raising of taxes will entail. Hopefully it will not contribute to dampening economic prospects further.
At the moment, the likeable Nene can be congratulated on saying the right things. He has made the most of a difficult fiscal situation, and seems to be willing to provide leadership.
Let’s hope his cabinet colleagues and officials at all levels of government buy his approach. If reason prevails, all sectors of the private sector will certainly join in the effort.
NEXT: Visit Fin24's Mini Budget Special for all the news.
- Fin24
READ: Budget in a nutshell
And most importantly, his solutions seem to be based on traditionally sound austerity measures and not ideological preferences. It augurs well for the future.
That said, the MTBPS or mini budget is just a policy statement with broad estimations. Clarity and detail on many aspects - like raising taxes, an important part of his solution - will only be given in next February’s national budget.
As he rightly points out, South Africa has reached a turning point. Economic realities do not look good, and we have to change course. As he puts it, “we have to be steadfast in our resolve to do more, together, with less".
His emphasis on maintaining core government services and focusing on public spending, promoting growth and an environment conducive to greater private sector investment is very positive.
READ: Mini budget to promote business growth
His statement that we must move from consumption to investment-driven economic growth is also worth a cheer.
But being hawkish in speeches and budget statements might not be enough. Huge problems regarding state-owned entities like Eskom, South African Airways, etc still exist and it might not be enough to just say they will be helped in a way that will not influence the budget deficit. In other words, taxpayers won't be asked to pay for rescue packages.
His solution for most of his financing problems at the moment seems to be the private sector. One just hopes he does not follow the common pattern that has often surfaced over the years among ANC politicians in their attitude towards business, the farmers and investors - that of making life very difficult for them, but then when things start to fall apart, running to them for rescue.
The private sector is no milking cow and will never be – it needs green pastures or otherwise it will just stop giving milk.
In this regard, South Africans will anxiously await next February to see what the raising of taxes will entail. Hopefully it will not contribute to dampening economic prospects further.
At the moment, the likeable Nene can be congratulated on saying the right things. He has made the most of a difficult fiscal situation, and seems to be willing to provide leadership.
Let’s hope his cabinet colleagues and officials at all levels of government buy his approach. If reason prevails, all sectors of the private sector will certainly join in the effort.
NEXT: Visit Fin24's Mini Budget Special for all the news.
- Fin24
* Jaco Leuvennink is one of Fin24's mini budget correspondents. Views expressed are his own.
