Gigaba faces moment of truth, says DA
TOMORROW’S medium-term budget policy statement ( MTBPS) will be a “defining moment” for Finance Minister Malusi Gigaba, who is not “trusted by the markets” the Democratic Alliance says.
DA spokesman on finance David Maynier said yesterday Gigaba’s maiden budget speech as finance minister would need to inspire confidence in investors and South Africans alike, but that he believed the minister had very little political space in which to manoeuvre.
Maynier said Gigaba would need to tackle five big challenges in his statement – among them, weak economic growth, which he believes will be revised down to about 0.6% for 2017 (from a February forecast of 1.3%) and “fiscal slippage” which will see the fiscal deficit increase and revenue fall. Maynier projects a revenue shortfall of about R56-billion for the 2017-18 year.
Maynier said the minister should also focus on institutional vulnerability with the autonomy of the Reserve Bank, the Public Investment Corporation (PIC) and the Treasury all currently under threat.
He said Gigaba who is “not trusted, especially by the markets” needed to make a “strong and unequivocal statement to the state capturers” and support the independence of the Reserve Bank, PIC and Treasury.
The fourth area of focus should be what DA deputy spokesman on finance Alf Lees termed “zombie stateowned enterprises” – such as the massive loss-generating South African Airways. Lees said “the minister will have no option but to provide for both an emergency bailout of SAA, totalling R5.2-billion, and a further R4.8-billion for working capital in the adjustments budget”.
The fifth area of concern was “longterm fiscal risks” such as the nuclear plan. Maynier said Sunday Times reports at the weekend that energy minister David Mahlobo was appointed after a warning from the Russians to push the project through “signals an intention to accelerate the programme, which is terrifying”.
Mahlobo, meanwhile, made his maiden speech as energy minister at the Africa oil and gas conference in Cape Town saying “South Africa recognises the role of nuclear power in ensuring security of energy supply and meeting the challenge of climate change”. — DDC