South Africans can expect yet another austerity budget, if Finance Minister, Pravin Gordhan’s comments are anything to go by.
The minister has said ahead of his mid-tern budget speech next Wednesday that “tough choices” will have to be made in order to create conditions for much needed growth.
Gordhan was addressing trade union, UASA’s congress in Boksburg when he called on labour, business, government and civil society and business to focus on continued cooperation to get the country through difficult economic challenges.
However, he emphasised that there were no easy feats, as the low growth rate required for even the labour movement to send a message to investors, that they were willing to make necessary changes to ease the labour market situation.
“One of the tough things that we are going to talk about in the MTB next Wednesday is that when you have low growth, you have low revenue and there are challenges with how much money you can be able to borrow because we borrowed a lot of money since the great recession of 2008 in our own situation, you have a lot of constraints. The package of money available to us is limited, then you have to make some tough choices.”
He also added that; “As a country we have to understand that unless we solve the low growth problem, we don't get the fiscal resources that are required in order to meet all of the needs, and often in public conversation the issue is find more money for X, find more money for Y, but all of that money has to be found in one envelope, there is no other envelope elsewhere.”
However, he expressed optimism over the impending visit by ratings agencies, saying the report card used to measure the milestones the country promised to reach during the last visit showed progress.
“There is sunshine waiting for all of us, if we do the right things, if we provide the right leadership, if we demonstrate the right kind of integrity in our leadership and be bold enough to make the changes that we need to make, in the economy and also in our society.”
This was however not likely to quell fears of a ratings downgrade by some quarters of society who believe the political uncertainty which threatened even Gordhan’s position, could warrant it.
On Tuesday, the minister informed the National Prosecuting Authority boss Shaun Abrahams that he would not be making representations asking for a review of the fraud case against him.
Gordhan and his two co-accused, former SA Revenue Service (Sars) employees Oupa Magashula and Ivan Pillay, were earlier invited to make representations to the NPA to review the case related to the early retirement and benefits paid to Pillay in 2010.