MPs unimpressed with Gordhanless budget debate

Mar 10 2016 07:02
Liesl Peyper

Cape Town -  MPs of all political parties in the National Assembly, bar the ANC, were not impressed that a debate on Finance Minister Pravin Gordhan’s budget continued on Wednesday in his absence.

Gordhan is currently overseas, where he is reassuring investors and trying to stave off an investment downgrade from rating agencies.

READ: Gordhan on mission to appease investors as downgrade looms

The ANC’s Yunis Carrim, also chairperson of the Standing Committee on Finance, kicked off the debate, saying Gordhan’s Budget Speech delivered two weeks ago offered South Africans the opportunity to be who they are.

He reiterated Gordhan’s plea for the country to “take the economic medicine now and everything will be better in the future”.

Carrim defended Gordhan’s absence in the National Assembly, saying the finance minister had to move swiftly to reassure the ratings agencies and international investors that South Africa is serious about rescuing its economy. “That’s why he is out of the country. He hasn’t been absent before. Nor is it likely to happen again.”

Democratic Alliance shadow minister of finance David Maynier said in his speech Gordhan found himself in a very tight spot with very little manoeuvring space - and even less political space - to successfully stave off the risk of a rating downgrade to “junk" status in South Africa.

READ: Moody's places SA on downgrade review

Maynier acknowledged Gordhan had important work to do comforting the international community, “but we feel strongly that with better planning, and with better coordination, the minister could have met with investors abroad and been present for the debate in Parliament”.  

He lauded Gordhan’s fiscal consolidation measures, such as reducing the consolidated budget deficit to at least 3% of GDP, maintaining a consolidated budget deficit below 3% of GDP and maintaining the debt-to-GDP ratio below 50% in 2016/17.

“But what we really need is real spending cuts, rather than cost containment measures. We need a comprehensive spending review, eliminating wasteful expenditure in all three spheres of government in South Africa.”

Maynier said a good place to start cutting spending would be on President Jacob Zuma’s bloated cabinet, “which could be reduced to 15 ministries, saving approximately R4.7bn per year, every year”.

Deputy Finance Minister Mcebisi Jonas stood in for Gordhan and concluded the debate, saying National Treasury is being tough on government, aware that it has to “do more with less”.

“There's no doubt that we are going through tough times but we're not about to collapse,” Jonas said. “Economic growth in our country depends on us accepting that there is more that unites us than that is dividing us.”

The budget was adopted with 218 votes in favour, 63 against and no abstentions.


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