Little room for finance minister to appease voters
A TIGHT ROPE balance – that is what is expected today from Finance Minister Pravin Gordhan when he delivers his budget speech. He is expected to balance South Africa’s social needs – considering there is an election just two months away – with the tough economic conditions and slow economic growth of the past year.
Nelson Mandela Metropolitan University Economics Professor Emeritus Charles Wait said Gordhan’s budget would be very tight, considering South Africa’s estimated income was very close to its budget.
“He does not have excess revenue to play around with. It is expected that social grants will be adjusted according to inflation and that he will not cut there, especially since it is an election year. Other priorities in the budget will be health and education,” Wait said.
However, he warned Gordhan should be very careful about any shortages on the budget since the credit rating agencies “are watching him with hawks’ eyes”.
Very little had been implemented from Gordhan’s mid-term budget last year which promised a cut in government spending on luxury vehicles and alcohol, Wait said.
“These cuts are incredibly necessary and it will be welcomed if he repeats it in his budget speech and even more so, if it is implemented.”
Eastern Cape ANC provincial secretary Oscar Mabuyane said the province was looking forward to seeing if the belt-tightening in terms of monitoring measures for government employees and politicians introduced by Gordhan with his midterm budget last year, had paid off over the past few months.
“We are expecting the minister to give a clear indication on the practical implementation of the political promises made by President Jacob Zuma with his state of the nation address. In the Eastern Cape, these political decisions include several infrastructure development projects,” Mabuyane said.
Nelson Mandela Bay Business Chamber chief executive Kevin Hustler said business would be watching the budget for measures that drove the economy.
“If we drive the economy and grow business, jobs will follow. Our chief wish is the same as it has been for a number of years – judicious spending on the country’s infrastructure. This must be distributed wisely, and with the future sustainability of the country in mind.”
It was imperative that there be clear support for projects that would rejuvenate the Eastern Cape economy, and that South Africa built its attractiveness to foreign direct investments, Hustler said.
Opposition political parties in the province were also vocal as to what they wanted Gordhan to say in his budget speech today.
DA provincial finance spokesman Bobby Stevenson said the party’s biggest expectation of the budget was a stimulation of economic growth in order to address the high unemployment rate.
“Funding should be made available for skills development and incentives for firms and small businesses to create more jobs,” he said.
COPE Eastern Cape spokesman Mbulelo Ntenjwa said it was imperative for Gordhan to focus his budget around infrastructure programmes and job creat ion.
“We need to move the country’s economic growth to higher than 3% by stimulating the economy. Being an election year, the budget should also respond to all areas causing tension in the nation, in terms of youth wages, student funding and most importantly, job creation.”
UDM provincial chairman Mongameli Bobani said more funding should be allocated to municipalities in order to address service delivery problems, in particular the eradication of the bucket system.
“It is inhuman for communities to still make use of the bucket system. The old-age pension should be increased by R1 000 a month, since the older persons in our society have contributed a lot to the country. With the high cost of food and petrol, their pension is simply not enough,” Bobani said.