Publications
Partners
Cape Town – Finance Minister Malusi Gigaba committed to narrowing the budget deficit to 3.3% and bring about a primary surplus in the 2018/19 financial year.
Gigaba was delivering a speech in conclusion of a debate in the National Assembly on the Appropriations Bill, which sets out how government intends to spend R767bn across 40 departments.
He admitted that the announcement that South Africa has entered a recession - after Statistics South Africa's announcement that GDP for the first quarter of 2017 contracted to 0.7% - is a "setback".
"We’re in difficult circumstances," Gigaba said.
He assured MPs that National Treasury in the coming weeks will give clarity on key policy areas as well as timelines for their implementation so that markets can be reassured.
Gigaba also gave his commitment to "speedily respond" to the issues raised by ratings agencies and said government will do its utmost to stabilise public debt.
Fitch: SA to miss revenue forecasts
Meanwhile, Reuters reported ratings agency Fitch as saying that South Africa is likely to miss revenue forecasts set out in a February budget while weakness in the running of state-owned companies will be a risk to fiscal deficit targets.
Fitch director Jan Friederich said on Thursday that business confidence had been dented by political infighting within the ANC ahead of a party conference in December, when a successor to President Jacob Zuma will be chosen.
"The ANC electoral conference in December 2017 will be key moment on the political scene," Friederich said in a recorded video aired at a banking conference in Johannesburg.
"There is a high risk that the policy environment will remain volatile even after the ANC has elected new leaders."
Gigaba: Populist rhetoric won't help SA escape recession
Gigaba in his speech to the National Assembly on Thursday said that the recession cannot be arrested and economic challenges can’t be overcome by resorting to populist rhetoric or by acting alone.
"The poor are not there as low-hanging fruit for opportunistic vote seekers. It requires sustainable programmes to address poverty and inequality," Gigaba said.
"While political parties bicker on the budget, the ANC and its social partners will multiply their united efforts. Our economy needs strong and focused leadership now."
DA proposes R10.8bn worth of changes to budget
Earlier in the debate, DA spokesperson on finance David Maynier said his party proposed 405 amendments to the Appropriations Bill, amounting to R10.8bn, to fund six proposals in 2017/18, which in his view will be a better way of prioritising funds for crucial needs.
Maynier is of the view that the reprioritisation will among other things create more jobs, support poor students and assist poor South Africans to battle high food prices.
The DA presented its proposals at a meeting of the appropriations committee, which convened on Wednesday, May 31. The proposals however were rejected.
Maynier said in his speech that the ANC rejected the DA’s budget proposals - not because they did not have merit, and not because they could not be funded, but because it was "too difficult" to rewrite the budget.
"We have to ask ourselves why the ANC would not support budget proposals to help South Africa. Well, the answer is simple. They don’t care about the unemployed or corruption," Maynier said.
Other opposition MPs during the debate slammed the ANC-led government for wastage and allegations of being implicated in a series of email correspondence between the Gupta family and high-ranking government officials.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
