Three common themes have emerged from political reaction to the medium term budget policy statement delivered in Parliament on Tuesday by Finance Minister Pravin Gordhan.
Opposition parties have broadly welcomed the minister’s warnings about a spike in the public sector wage bill, expressed concern about the waste of taxpayers’ money and criticised the lack of details about how the government will pay for the National Health Insurance (NHI) scheme.
But the ANC hailed the policy statement as “the epitome of alleviating the economic hardships that the majority of our people experience”.
The ANC also noted that the policy statement was “in line with the ANC election priorities (to create) decent work, reduce poverty, build infrastructure and expand our economy”.
DA MP and finance spokesman Dion George welcomed Gordhan’s “commitment to cutting the fat” and his emphasis on “growing the economy and creating an environment conducive to job creation”.
However, the MP said the DA had expected more details about how the government planned to tackle unemployment, improve the quality of public health care and manage public finances more efficiently.
“It is not enough to speak about the virtue of cutting wasteful expenditure – the minister needed to lay out a clear plan on how he planned to actually do it.
“We needed concrete details on how this systemic problem is going to be fixed,” he said.
Gordhan warned on Tuesday that “(p)erceptions that government and its officials are living large undermine public trust”.
He was also forced to allocate extra funding to this year’s budget to cover “higher-than-planned wage bills” after the strike season left the state with an extra R4.4 billion salary bill.
On the NHI, George said he was disappointed that the policy speech provided no further details about how the programme was to be funded. “We cannot just focus on state investments in infrastructure, education and health as an economic strategy. We need programmes by the government that help the private sector to employ more people,” he said.
IFP MP Mario Ambrosini was scathing in his criticism of Gordhan, saying the minister’s plan offered a “small austerity package when a big one was necessary”.
He warned that, despite the finance minister’s apparent optimism, the full brunt of the global recession would eventually hit our shores – albeit with a significant time lag – and that the country was wholly unprepared for this.
Ambrosini suggested that South Africa was following the “same path leading in the same disastrous direction” as countries such as the US, Greece and Italy.
“Pravin Gordhan and (Trade and Industry Minister) Rob Davies are keeping our public and private industries on a plan of steroids made of subsidies, protective measures and indirect taxation imposed on all consumers – and this is not sustainable,” the MP said.
ID spokesman Lance Greyling said the policy statement was essentially a “signalling exercise”, but that the signals being sent out “should make us all a bit cautious”.
It should never happen again that the country was forced to borrow money to settle its wage bill, he said.
He also expressed disappointment that the finance minister had failed to provide details on what it was going to cost to implement the NHI. But he welcomed Gordhan “sending out the right signals regarding the prioritisation of infrastructure investment over consumption”.
“The minister has alluded to the ballooning (public) wage bill a number of times and the ID believes that he is right to raise this caution. As to whether the wage increases can ibe kept to 5 percent next year remains to be seen,” he added.
Greyling was also let down by the lack of clarity on the possible introduction of a youth wage subsidy. This suggestion enjoys broad opposition party support and has been on the discussion table for some time now. He welcomed the extra R10 million allocated to the public protector and urged the finance minister to make this a recurring budget item, rather than a once-off payment.
FF Plus leader Pieter Mulder said the finance minister’s attempts to balance the state’s books appeared “increasingly desperate” as the Treasury was running out of fiscal options.
“South Africa cannot afford to keep borrowing money to pay for current expenditure, like an increased public wage bill, while infrastructure investment was being scaled down,” he warned.
He joined other parties in calling for more details about the proposed NHI and warned that, if the government planned to pay for the scheme by raising taxes, it would be a “big blow” to the economy.
ACDP MP Steve Swart said his party “broadly supports” the medium term budget, but was concerned that state debt levels and debt service costs would eventually crowd out developmental spending.
And while he expressed support for plans to inject financial support into industry over the short term, Swart urged Gordhan to “address wasteful, irregular, unauthorised and corrupt state spending”.
Cosatu could not be reached for comment. - Political Bureau