In politics, finance ministers often have the unenviable task of bringing everyone back to reality.
In our case, this task falls squarely on the shoulders of Pravin Gordhan, reappointed in December 2015 by President Jacob Zuma to stabilise the National Treasury.
His sudden reappearance was precipitated by the chaos that ensued after the sacking of his successor, Nhlanhla Nene.
Although Gordhan’s current tenure as finance minister has provided some semblance of calm, a lot of challenges persist.
If anything, Gordhan’s national budget speech scheduled for tomorrow should provide a sobering assessment of South Africa’s fiscal constraints and structural obstacles to robust growth.
The reality for South Africa is that the country needs Gordhan to be very frank about our fiscal challenges, and above all else he needs to remind the nation that it can no longer be business as usual.
Bleak outlook
In October, Gordhan said South Africa was at a “cross-roads” as he spelled out a bleak outlook for government finances, with national debt set to balloon well above two trillion rand at a time when tax revenues are shrinking.
His medium-term budget policy statement also forecast an annual shortfall of as much as R28 billion in tax revenue in this new fiscal year.
When coupled with economic growth that is sub-par, this shortfall means tax increases are a sure bet for tomorrow's budget speech.
Undoubtedly, Gordhan’s trademark candour will again underscore the difficulty facing the country, especially as policy makers try to keep sovereign credit rating downgrades at bay.
More importantly, as a business association, the Johannesburg Chamber of Commerce and Industry (JCCI), is looking for Gordhan’s budget speech to provide a clearly discernible plan to revive growth.
Absent that plan, there is likely to be caution all around, and confidence will be undermined even further.
Gordhan will be mindful of the fact that the last thing this fragile economy needs are tax increases that will curtail investment, hurt the poor and divert critical resources toward unproductive pursuits.
We accept that business is a critical ally for the government to realise its stated objectives of transforming the economy, reviving growth, enabling enterprise development, boosting investment and reducing poverty and inequality.
As the JCCI, we have been very pleased with the progress we have made in our continuing drive to consolidate efforts aimed at creating a sustainable partnership for growth across all key stakeholders.
Our economy needs business, labour, civil society and government to eradicate the trust deficit. This is something business hopes will be reiterated and affirmed as a stated directive to all social partners in Gordhan’s Budget speech.
The looming introduction of the minimum wage is a case in point as it represents one of many tests that will determine the extent of the co-operation between business, labour, civil society and government.
Gordhan is also likely to talk about the need to cut government waste and fight corruption. All of that would be welcome news, but words alone will not be enough to cause seismic shifts in behaviour.
On one hand business stands ready to play its role as a catalyst for development, investment, growth and transformation, while also supporting every effort to foster good and clean governance at both the public and the private sectors.
But on the other hand, government’s commitment to fiscal rectitude will have to be matched by a tight rein on all the resources at its disposal to ensure that there is proper accountability.
Ernest Mahlaule is the president of the Johannesburg Chamber of Commerce.