Mini budget not bold enough - DA

Finance Minister Pravin Gordhan delivering his 2013 Budget Speech in the National Assembly, Parliament, Cape Town. 27/02/2013, Elmond Jiyane

Finance Minister Pravin Gordhan delivering his 2013 Budget Speech in the National Assembly, Parliament, Cape Town. 27/02/2013, Elmond Jiyane

Published Oct 23, 2013

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Finance Minister Pravin Gordhan’s 2013 MTBPS is full of reassuring rhetoric but not nearly bold enough in tackling serious economic problems, the Democratic Alliance said on Wednesday.

“Today there are 1.4 million more unemployed South Africans than there were on the day Jacob Zuma became president,” DA spokesman Tim Harris said after Gordhan tabled his medium-term budget policy statement (MTBPS) in Parliament.

Lacklustre economic growth - which had slowed from 3.5 percent in 2011 to just over two percent this year - meant other developing economies were leaving South Africa behind.

Countries like Chile (4.1 percent), Malaysia (4.3 percent) and Turkey (4.4 percent) were all growing twice as fast as South Africa, showing the Treasury was simply wrong in blaming “global circumstances” for slow growth.

“Instead, we have to look at our recent domestic issues, what Treasury calls 'labour disputes, electricity shortages and other supply-side disruptions', which this budget contains no significant new measures to address.”

Gordhan pointed out the problems, but did not table any new measures to tackle them.

“We welcome the continuation of the 'spending freeze' and the minister's commitment to tackle excessive spending on air travel, car hire, accommodation, catering and entertainment in 'cost-containment instructions to be issued with the 2014 Budget'.”

However, it was a pity these instructions had not been issued now, since government departments had, on average, increased spending on these items by six to 10 percent this year, threatening Gordhan's ability to constrain spending growth to around two percent.

The budget also raised serious questions about fiscal sustainability Ä40 percent of this year's budget would go into salaries. This amount would increase by almost seven percent each year for the next three years.

The fastest growing budget item over the medium-term would be interest payments, which would increase by 9.7 percent a year for the next three years.

“By 2016 we will be spending R140 billion servicing our R2.2

trillion debt. This will be more than we spend on healthcare in that year.

“The only way to turn this situation around is for the minister to start turning his reassuring rhetoric into real action to drive growth, create jobs and tackle our economic problems,” Harris said. -Sapa

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