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Govt urged to curb debt, stop looting in mini budget debate

Cape Town – South Africa’s debt is currently more than R2trn and if there are no measures to curb this, the country's resources to fight poverty and inequality will soon diminish, Deputy Finance Minister Mcebisi Jonas said on Tuesday.
 
He was the last speaker in a debate in the National Assembly about the mini budget which was delivered by Finance Minister Pravin Gordhan on October 26 this year.
 
“The 2016 MTBPS (medium-term budget policy statement) aims to bring a message of hope at a time of domestic and international uncertainty,” Jonas said, adding that the country should take pride in the fact that a rating downgrade has been avoided.

The three largest rating agencies - Fitch, Moody’s and Standard & Poor’s - retained South Africa’s sovereign credit rating over the past two weeks, which means the country is still regarded as an investment destination.
 
Jonas added that National Treasury has taken note of the recommendations of Parliament’s finance committees and that he and his colleagues will report back more regularly on progress made and risks to the economy.
 
“We must grow economic transformation and bring about action that opens new avenues for investment and employment growth,” Jonas said.
 
The Democratic Alliance’s David Maynier said although Gordhan called on government to “tighten belts” and implement “cost containment measures”, it was difficult to understand why the adjustments budget is dripping with more than R1.29bn of “wasteful expenditure”.

R96m for leasing Zuma's planes, luxury cars for ministers

The budget contains an additional R95.67m for the “leasing of aircraft” for President Jacob Zuma, who now refuses to travel in his own Boeing business jet Inkwazi, Maynier said.

He also listed a number of ministers and deputy ministers who acquired luxury vehicles in the current financial year.

READ: INFOGRAPHIC: Govt to fork out R7m on 9 luxury cars

“What is so frustrating is that the economy could be doing so much better in South Africa. We are being held back because the root cause of the problem is that we have a government that is at war with itself and, in the end, it is the politics that is killing the economics in South Africa.”
 
Maynier said he will soon be proposing the establishment of a “multi-party ad hoc committee” to specifically monitor the implementation of the structural reforms necessary to boost economic growth and create jobs in South Africa.
 
Elsabe Louw of the Economic Freedom Fighters was critical of the so-called structural adjustments in the mini budget that merely serve to appease ratings agencies but which are “anti-black” and “anti-poor”.
 
“The medium-term budget is yet another example of a government that is incapable of planning,” Louw said, adding that there’s a consistent disregard of reducing wasteful and irregular expenditure.
 
“Buy your own cars and stop looting,” Louw said, referring to ministers who had acquired luxury official vehicles in the current financial year.
 
The Inkatha Freedom Party's Mkhuleko Hlengwa said in his speech he was concerned about South Africa’s debt, which currently totals over R2trn, and debt service costs of R147bn.  

READ: Gordhan warns of junk status impact on SA debt

Nqabayomzi Kwankwa of the United Democratic Movement said government should be cautious and not “bail out” state-owned enterprises “willy nilly”.


“It exposes South Africa to more risk.” He cited a recent report that showed South Africa’s ratio of debt to gross domestic product would be as high as 70% if contingent liabilities are taken into account.

Steve Swart of the African Christian Democratic Party said in his speech his party supports the mini budget, but with reservations. “We realise the medium-term budget was delivered amid intense political pressure and intimidation from those involved in state capture,” he said, with reference to charges laid against Gordhan by the National Prosecuting Authority 14 days before he delivered his speech.

The ANC’s Nkhensani Shope-Sithole said the under-spending and over-spending that had to be accommodated in the Appropriations Bill occurred because Parliament failed in its oversight role.

“We can’t sit in air-conditioned boardrooms and listen to ‘essays’. Oversight is what the constitution requires of us. We must be economic with the airtime that the country affords us,” she said.

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