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PROACTIVE: Delivering his third Budget speech yesterday, Finance Minister Pravin Gordhan said we cant wait for Europe to recover  we have to find our own way out of this crisis. Picture: Leon Lestrade

GAYE DAVIS

THE BUDGET unveiled by Finance Minister Pravin Gordhan yesterday will take government spending past the R1 trillion mark for the first time – but also reduces the country’s debt, gives taxpayers and small businesses a break, and puts a little extra in the pockets of state pensioners and those on grants.

It also lops R5.8 billion off the R20bn cost of the Gauteng Freeway Improvement Programme, meaning that while tolling will go ahead, a steeper discount will be possible for road users.

Gordhan’s third Budget will see spending run to R1.1 trillion next year – 32 percent of gross domestic product. It’s designed to put the country on an investment-led growth path that will create jobs and result in billions of rand being ploughed into much-needed infrastructure, without cutting back on social support, healthcare or education.

Briefing journalists yesterday before delivering his speech in Parliament, Gordhan said risks in the global economy might persist for up to a decade. “We can’t wait for Europe to recover – we have to find our own way through this crisis.”

Billions will be needed to refurbish schools, hospitals and creaking municipal water and electricity systems, as well as the road, rail and port projects that all form part of the infrastructure development drive announced by President Jacob Zuma in his State of the Nation address.

The Treasury’s Budget Review lists 43 major projects, adding up to expenditure of R3.2 trillion.

Over the next three years, approved and budgeted infrastructure plans amount to R845bn, of which just under R300bn is in energy, and R262bn in logistics and transport projects.

“Where will the money come from? We’ll find the money,” Gordhan pledged.

He said the government had a “sovereign framework” of about R4 trillion in resources available to it over the next three years. It would fund those projects that were not already funded, or part-funded, from that.

This would involve state-owned enterprises, development finance bodies and big business, and would be overseen by the Presidential Infrastructure Co-ordinating Commission.

Gordhan said the government had to show it had the will and ability to implement and deliver – and that it got value for every rand it spent.

That would mean boosting the capacity of the state and dealing with the fraud and corruption that has seen billions in public funds siphoned off by crooked officials.

A new national procurement and monitoring system would help shut out “a minority” of public servants engaged in “dirty activity” and keep a lid on prices often inflated by suppliers.

SA had to become more competitive to compete in a global market where the centuries-old dominance of Western economies had given way to those of Brazil, Russia, India and China (Brics), and needed to explore opportunities not only in the Brics but also in Africa.

“Adaptability is the key word for this period,” Gordhan said.

Plans to reduce public sector wage increases to a target of 1 percent a year are likely to anger unions – but Gordhan said sacrifices had to be made.