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Introduce structural reforms in medium-term budget‚ DA urges Gordhan

Picture credit: Trevor Samson.
Picture credit: Trevor Samson.

The DA in Parliament on Monday challenged Minister of Finance Pravin Gordhan to introduce structural reforms to assist the economy during Wednesday’s medium term budget policy statement‚ including getting a private equity partner for the embattled SAA.

Three of the official opposition party’s members of parliament said in a briefing that Gordhan had an opportunity to “kickstart economic growth” with measure such as providing for strike ballots to reduce industrial action and increase private sector investment in state owned enterprises.

This follows remarks by Public Enterprise Minister Lynne Brown that the a merger between the state’s three airlines was highly unlikely‚ but that left the door open to private equity partner with 25% of a new company holding the airlines.

Speaking to reporters in Parliament on Monday‚ DA MP David Maynier said the minister’s statement comes at a time when the government was “at war with itself” citing Deputy President Cyril Ramaphosa’s concerns about the current state of affairs.

“The minister does so in an environment characterised by high levels of political uncertainty‚ low economic growth‚ high inflation‚ very high unemployment and a possible sovereign ratings downgrade of South Africa‚” Maynier said.

Another DA MP‚ Alf Lees‚ said weaker-than-expected economic growth undermined the total consolidated revenue of R1.32 trillion budgeted for in the 2016-2017 financial year‚ which also accounts for 30.2% of gross domestic product.

“The revenue data of the first five months indicates that revenue was growing at 7.13% compared to the budgeted revenue growth of 9.8% in 2016-2017. The projected revenue shortfall‚ as a result of lower-than-projected economic growth‚ which is very difficult to forecast‚ may be significant in 2016-2017‚” said Lees.

He said the expenditure ceiling of R1.15 trillion for 2016-2017 was maintained by cutting compensation of employees‚ reprioritising spending and improving the efficiency of spending through containing costs and introducing procurement reforms.

Maynier said one of the critical areas where spending of as much as R4.7 billion a year could be cut would be in the “bloated” cabinet. He also mentioned the R2.5-billion fund for a zero-fee increase for university students from households earning less than R600 000 per annum.

“A comprehensive spending review would require National Treasury…to review the composition of spending and efficiency of spending as well as future priorities like the nuclear programme‚ national health insurance‚ higher education and the public sector wage bill‚” said Maynier. — TMG Digital

 

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