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Medium-Term Budget Policy Statement delivered

Pravin Gordhan - Budget Policy

Pretoria – Business has welcomed the Medium-Term Budget Policy Statement (MTBPS) delivered by Finance Minister Pravin Gordhan.

Medium-Term Budget Policy Statement

“The South African Chamber of Commerce and industry (SACCI) welcomes the announcement of the MTBPS delivered by the Honourable Minister of Finance Mr. Pravin Gordhan,” said SACCI following the tabling of the MTBPS in Parliament, on Wednesday.

In his maiden MTBPS since returning to the National Treasury portfolio, Minister Gordhan said Treasury had revised the country’s growth down from the 0.9% projected in the February national Budget to 0.5% in 2016.

SACCI said it was concerned at the revised growth target for 2016 but that the 0.7% growth predicted for the 2017 fiscal year is encouraging albeit being low.

The MTBPS said investment in infrastructure remains a policy priority with public-sector infrastructure investment plans totalling R987.4 billion over the medium term, of which R334 billion is in transport and logistics, and R137 billion in water and sanitation. Investment in energy infrastructure totals R243 billion over the period.

“The Minister’s announcement of R900 billion plus in proposed infrastructure expenditure should ignite significant economic activity to drive job creation and establish the necessary infrastructure platforms in energy, logistics and telecoms.’

‘”These investments are key in consolidation and improving South Africa’s global competitiveness as an investment destination,” said SACCI.

SACCI said it is hopeful that stakeholders will react positively to the Minister’s announcement of additional funds that will go towards higher education.

“We hope that these measures will be received positively by the key stakeholders, especially the affected students,” it said.

This, as Minister Gordhan announced that universities and students will receive an additional R17 billion over the term with R9 billion going to the National Student Financial Aid Scheme over the period ahead and over R8 billion to meet the costs of fee increases for students from households with incomes up to R600 000.

The Chamber encouraged Minister Gordhan to continue with austerity measures to bring inline the non-investment related expenditure, including wasteful government spending.

“We however caution the Minister from adopting austerity measures which may, appear good on the face of it, yet have a negative impact on the SMME sector which relies mainly on supplying goods and services to government departments and related entities. This could have a devastating effect on job creation and can cause job losses especially amongst the low skilled workforce.”

Mini budget given under difficult conditions

Meanwhile, Public Service and Administration Minister Ngoako Ramatlhodi lauded the MTBPS, saying it was a mini budget given under difficult circumstances.

“It is a statement given under very difficult conditions. We are restrained but I think we are alive to the challenges that face government and within that context we are trying our best to meet our basic obligations to the nation and to the country,” said Minister Ramatlhodi who contributed to the building of the statement.

On whether the MTBPS will help South Africa avert a credit rating downgrade in December, the Minister told SAnews that the country has done what it could to avert a downgrade.

“We’ve done what we could to avert a downgrade on our part but we hope it is good enough,” he said.

Health Minister Aaron Motsoaledi heaped praise on the Minister of Finance given the lack of economic growth.

“I really heap praise on the Minister of Finance and his team. This was a very difficult job. To balance it like that, [in conditions] of lack of growth, meaning that the revenue has not expanded …..  But still to protect social services like education, health and social development and still try to include resources for inclusive growth, it was a difficult task. Under the circumstances they’ve really done their best,” said Minister Motsoaledi. –

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