Zuma wants feedback on new fiscal plan for SA

PRESIDENT Jacob Zuma has directed Finance Minister Malusi Gigaba to brief him this week on plans to cut government expenditure by R25 billion and find ways of raising about R15bn.

Zuma said yesterday he wanted a financially sustainable plan for the roll-out of free education for students from poor and working backgrounds.

This comes after the country was downgraded to junk status by Standard & Poor’s on Friday.

Zuma directed Gigaba, to be assisted by the presidential fiscal committee, to identify concrete measures to urgently address the challenges identified in the recent mediumterm budget speech.

Gigaba recently painted a gloomy picture of the country’s economic situation, including a budget shortfall, rising government debt and low economic growth.

“The president as well as the cabinet have reaffirmed the government’s commitment to maintain a sustainable fiscal framework and to ensure that a solution is found to address the roughly R40bn gap that has been identified, through a combination of expenditure reductions and revenue-enhancing measures.” Zuma said he had directed Gigaba and the presidential fiscal committee to focus on four areas in preparation for the 2018 Budget.

He named a proposal to cut government expenditure by R25bn as one areas of focus.

“Such proposed cuts should not be in areas that will negatively affect economic growth prospects and job creation.”

The other proposals include coming up with measures to raise R15bn and finding ways to get money to fund the proposal for fee-free higher education for students from poor and working-class backgrounds, and identifying economic stimulus measures to grow the economy at a faster rate.

“President Zuma will in the coming days meet with the presidential fiscal committee to receive a progress report on the work done on the above.”

Gigaba said he welcomed Zuma’s statement and committed to work together with the committee and social partners. Gigaba said despite the slowing growth in allocations, the responsibility of “‘radical” and inclusive growth remained the responsibility of all.