The DA on Monday urged Finance Minister Pravin Gordhan to curb both the budget and the fiscal deficits in his medium-term budget policy statement, and take a firm ideological stance against pressure from the left.
Democratic Alliance finance spokesman Tim Harris said with the budget deficit forecast to hit five percent and the current account deficit widening as exports lagged, it was imperative that the minister act to restore competitiveness to the economy.
He should do so by increasing infrastructure spending, tackling the rise in water, electricity, and communication prices, cutting red tape in the domestic market, and opening trade with the rest of Africa.
Crucially, Harris said, the time had come to announce the final abolition of exchange controls, which he described as a “huge inhibitor” and a vote of no-confidence in the country.
Harris said official infrastructure spending not only lagged woefully behind the 10 percent mark, but government departments had in the past four years failed to spend an average 22 percent of their budgets earmarked for this.
On the other hand, he added, it was time to rein in state spending on “bloated ministries”, the president's personal home in Nkandla, and failing public enterprises, some of which should be privatised.
“We need Gordhan to draw a line in the sand on public spending,” he said.
Top of the DA's list to tackle the budget deficit was restoring confidence to the key mining and automotive sectors and squaring up to opposition to the policies set out in the National Development Plan in the tripartite alliance
Though labour was not Gordhan's remit, he should as a Cabinet heavyweight help lead the way out of the “ideological gridlock” bedevilling policy-making in the executive.
“I think we need him to send a brave signal on Wednesday on how he would like to see these problems in our labour sector handled.
“The finance minister needs to use his heft to show that it is unacceptable to have a labour relations system as broken as ours.”
Gordhan last week said government would speak to the automotive industry after BMW halted plans to expand its local plant capacity and admitted that the pull-back was “a worrying sign” given the importance of the sector in creating new jobs. -Sapa