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One can only drive as far as your fuel tank will allow, Trade and Industry Minister Ebrahim Patel told Members of Parliament on Tuesday as he discussed his department's response to recently announced budget cuts.
Finance Minister Tito Mboweni last week tabled the national Budget, announcing budget cuts in several areas - including the public sector wage bill - to save as much as R261 billion over the next three years.
The department of trade and industry was not spared. Briefing members of the portfolio committee on trade and industry on Tuesday, Patel shared the department's response to President Cyril Ramaphosa's vision in the state of the nation address and the "fuel tank" that would make it possible - national budget.
The department's planned budget for the next fiscal year has been reduced from R11.7 billion to R11 billion. Thereafter, a further cut to R10 billion is expected for the subsequent year (2021/22).
The department expects a breather in (2022/23) with a planned allocation of R10.5 billion.
Tall order
Patel said that the department would have to think differently in order to use its 'fuel' sparingly. Partnerships with the private sector and organised labour may come in handy to leverage off existing resources, he noted.
"When your fuel tank is limited, you need to think of partnerships to be able to ensure you go further to simply what you can do on your own fuel tank," Patel said. "This involves much closer working with the private sector and organised labour to see how we can tap the broader resources in society to achieve the goals we have set ourselves."
The dti, however, has a tall order from the president, which includes promoting investment, developing master plans to boost industries, enabling competition and an open economy, addressing spatial development through special economic zones, improving the ease of doing business, and assisting in the implementation of the African continental free trade agreement.
Coronavirus impact
Amid budget cuts and a mandate to help bolster the economy, members of Parliament did not ask the minister about the coronavirus outbreak, which saw markets reeling over the past few weeks, with analysts trying to determine whether it might lead to a global recession. Companies like Shoprite have warned that coronavirus could potentially wipe out R100 million in turnover, and Woolworths has warned that its winter stock levels might be impacted due to a delay in imports from China, Business Insider previously reported.
When asked by Fin24 what government intends to mitigate the impact of the virus on the local economy, Patel said a task team is being established to examine the impact of the virus on the economy and to set mitigating measures.
"It is new territory, not just for our economy but globally because everyone is searching for answers," Patel said. The extent of the impact of the virus is not yet known. "We do not know the precise impact that is what we are going to try and do our best to model, and to identify mitigating measures."
Patel said the priority is to firsts put in place health measures to prevent the spread of the virus within the country.
The SA government in the meantime has a plan in place to repatriate 151 citizens from Wuhan, China where the outbreak occurred. The citizens are not infected, and once arriving in SA they will be kept under strict quarantine conditions, Health Minister Zweli Mkhize said at a briefing on Sunday, News24 reported.
