Minister Gordhan will deliver this year’s Budget in the most turbulent and uncertain political environment ever experienced in South Africa since the advent of our democracy. It is indeed a watershed moment in the nation’s political history and one that will no doubt have great ramifications going forward, either good or bad, being dependant on how this year plays itself out within a ruling party at war with itself.
Minister Gordhan has the unenviable task of navigating this hostile environment of not only political turmoil but also severe fiscal constraints courtesy of South Africa’s current lacklustre economic growth which is not expected to exceed 1.3% in 2017. Furthermore, he is expected to find R28 billion in additional fiscal revenue as alluded to in his Medium Term Budget Policy Statement last year.
The IFP expects the Minister to centre his speech around how he proposes to give effect to the Presidents so called, “Radical Social Economic Transformation” Agenda. This should encompass being pro economic growth and development, job creation and expansion of tax base, whilst at the same time tackling inequality and poverty alleviation.
Once again, a pragmatic balance will have to be found in dealing with “competing priorities”. “Needs before wants” must be the criteria as the opportunity cost of governments current “wants before needs” approach will only plunge this country further into socio-economic disorder.
The IFP accordingly seeks reassurance from the Minister that the fiscal systems in place are strong enough to weather the impending storm irrespective of what transpires in the ruling party political arena this year?
The Minister will need to be reasonable and measured in how he raises taxes and increase fiscal revenue. A good point of departure would be to slash government spending by focussing on needs and not wants.
The escalation of our National debt remains another grave concern especially in light of looming credit ratings agency downgrades. Indebtedness of R1.7 trillion is not a position of strength when measured against fiscal revenue of R1.2 trillion.
The fight against corruption, fraud and maladministration must be intensified. The IFP will continue to call for the establishment of a special corruption court which deals specifically with transgressions of the PFMA, MFMA and other treasury legislation and regulations in both the private and public sectors.
Foreign Investment is crucial to economic growth and job creation and yet this government continues to create an environment which is not conducive or attractive to foreign investors. We are even witnessing a trend whereby domestic business is looking abroad rather than at home when deciding on new business acquisitions. A good point of departure would be a reasoned look at our existing labour laws in order to ascertain whether they favour investment, economic growth and job creation or not?
Social Welfare dependency commitments should never be at the expense of economic growth and developmental obligations. Fostering a domestic environment in which the strategies of “Self-Help” and “Self-Reliance” can flourish is the only solution to poverty alleviation and eradication in South Africa.
Student funding remains in a quagmire of uncertainty. Government has to date merely put in place temporary and placatory solutions to this challenge. The IFP expects clear directive from the Minister as to how this government will solve the crisis of #FeesMustFall.
In conclusion, we look forward to the Ministers address tomorrow and his unpacking of how Treasury intends implementing government’s Radical Social and Economic Transformation Programme in this difficult political, social and economically constrained period.
Contact:
Hon. Mkhuleko Hlengwa, MP
071 111 0539
IFP spokesperson on Finance
IFP Media, Parliament
