Drastic measures needed – Gigaba
THE national Treasury’s growth forecast of 1.3% for this year may be at risk‚ according to Finance Minister Malusi Gigaba.
Speaking at the Tax Indaba in Sandton yesterday, Gigaba said he was positive that growth would materialise in the coming quarters, but that a revised outlook might be revealed in the Mid-term Budget Policy Statement to be released on October 25.
Gigaba said the GDP growth for the second quarter of this year was promising, but that there was broad-based weakness in the industrial and services sectors.
GDP growth for the second quarter was 2.5% quarter on quarter and 1.1% year on year.
“The most important step we can take to develop the country is to get South Africans working,” Gigaba said.
“We welcome initiatives from the CEO Initiative and Business Unity South Africa to grow the economy inclusively.”
Gigaba said he would focus on the 14-point plan announced in June to bolster growth.
“Although the second quarter GDP growth came as a relief to all of us, our level of growth is clearly insufficient and unsustainable,” he said.
“We simply have to take drastic measures to grow the economy sustainably.”
Gigaba said taxation remained crucial to South Africa’s democracy and allowed the state to provide public services.
“The government bears the responsibility to manage public finances prudently and effectively‚” he said.
Gigaba said there had been greater public interest in tax policy after a few years of below-par growth. SA Revenue Service commissioner Tom Moyane said the revenue target for this year remained a huge stretch in an economy with weak growth.
“The role of SARS as a tax organisation becomes even more significant with low economic growth, but SARS remains committed to its mandate of collecting all its revenue for the year,” he said.