JOHANNESBURG - The medium term Budget Policy Statement (MTBPS) tomorrow is an opportunity for Finance Minister Malusi Gigaba to take a stand against the “big five challenges” slowing much-needed economic growth.
DA MPs David Maynier and Alf Lees, who are shadow finance minister and deputy respectively, called on Gigaba to take decisive action to reverse the decline of Africa’s largest economy, forecast to grow by a mere 0.7percent this year. They want the minister to present a credible plan to boost economic growth to an average of at least 3percent.
Gigaba needs to present a credible plan to reform “zombie” state-owned enterprises, such as the cash-strapped national carrier SAA, and support the independence of financial institutions, including the Public Investment Corporation, the SA Reserve Bank, and the National Treasury. Maynier and Lees, who welcomed Dudu Myeni’s recent sacking as SAA board chairperson, slammed her for behaving like a “corporate warlord”.
They accused her of generating losses amounting to R15.3billion during her controversial tenure at the airline, which requires bailouts of R10bn in 2017/18 and a further R3bn in 2018/19 to stay afloat. Gigaba also needs to pull a rabbit out of his hat by ensuring that the national debt remains below 60percent of the gross domestic product (GDP). The national debt was expected to be R2.26trillion, or 49percent of GDP, in 2017/18.
The DA MPs said because of the lower-than-expected economic growth, revenue, which was projected to grow at 10.61percent has only grown by 6.14percent. This suggested “there may be a revenue shortfall of about R56.5bn in 2017/18”.
“Moreover, expenditure, which was projected to grow at 8.09percent, has only grown at 6.95percent, suggesting there may be an underspend of as much as R16bn in 2017/18.” Maynier and Lees said the “fiscal slippage” as a result of lower-than-expected economic growth would require a fiscal adjustment beyond the R46bn “already pencilled in for 2018/19”.
They also noted that there was “general paralysis” with the executive behaving like “wasps in a jar” as the ANC, led by President Jacob Zuma, headed toward its national elective conference in December. “The minister (Gigaba) is widely regarded as having played a major role in greasing the wheels of state capture and is not trusted, especially by the markets,” the DA MPs said.