Political parties advise Gordhan not to blow budget, curb corruption
PARTIES in Parliament urged Finance Minister Pravin Gordhan to stick to the fiscal consolidation path and avoid blowing the budget when he tables his medium term budget policy statement (MTBPS) tomorrow.
The opposition said yesterday that despite slow economic growth, Gordhan must maintain the expenditure ceiling and cut wasteful spending to avoid a downgrade in December.
Gordhan will table the MTBPS at the time the ratings agencies will be keeping an eye on South Africa.
They are coming to South Africa early next month to conduct another review before announcing the results in December.
The National Treasury, the World Bank, the International Monetary Fund and the South African Reserve Bank all projected economic growth of less than 1 percent this year.
DA MP David Maynier, who sits on the standing committee on finance, said they were expecting to announce structural reforms in the economy to boost growth.
He said they wanted the minister to stick to fiscal consolidation and the deficit to be at 3.2 percent of the gross domestic product.
The DA also wants Gordhan to announce zero-fee increases for university students.
IFP chief whip Narend Singh said they expected Gordhan to walk a tightrope in his MTBPS.
“It’s going to be a tightrope the minister will be walking with the slow economic growth and the political instability that we see,” he said.
He said business will have to come to the party and invest in the country’s economy.
“Business is sitting with large sums of money on their balance sheets, billions of rands.
“We need the R600 billion they are sitting on to invest in infrastructure development.”
Singh warned that the country needed to do more to avoid a downgrade in December.
The ratings agencies will be in the country in the next few weeks and South Africa will have to get things right to avert a downgrade to junk status, he said.
African Christian Democratic Party (ACDP) MP Steve Swart said they wanted Gordhan to continue to rein in expenditure in government.
“The key thing for us is to ensure the minister speaks to the fiscal consolidation path, that means to keep the expenditure where it is and address corruption.”
Swart also warned the budget deficit must not come above 3 percent of the GDP.
The ACDP was also concerned about the slow economic growth.
Swart expects Gordhan to deal with the issue of funding students at universities.
“The minister is not going to announce major differences to his budget in February. If he speaks to the fiscal consolidation path he will allay fears of a downgrade.”