Cape Town - 101027 - Pravin Gordhan, minister of finance, delivered the Mid Term Budget report today at Parliament in Cape Town - Photo: Matthew Jordaan

Finance Minister Pravin Gordhan on Tuesday warned of tougher times ahead for the South African economy, particularly in view of the European crisis.

Speaking in the National Assembly during debate on the main budget, he said the European crisis, and the fact that there were lower growth patterns throughout the world today, meant expectations should be lowered about what future budgets could look like.

Gordhan said it was important to clearly understand the developments unfolding in the world, particularly in Europe, and what potential impact they could have on the South African economy, the jobs situation, growth prospects, and the fiscal balances and framework “that we've been trying to sustain going forward”.

There could be further negative impacts on revenue collection in the coming year if Europe did not sort out its problems, and there was no evidence that it would faster than it had been able to do up to this point.

He appealed to all in government, including the executive, to keep a much more careful eye on how money was being spent.

It was necessary to undertake more rigorous exercises to save more money and redirect money in the right direction, he said.

“We need to constantly remind ourselves that this is taxpayers' money that we are talking about and that taxpayers are becoming impatient with the fact that we are not adequately providing value for money.

“In the South African context, we must continually ask... what are our priorities, are we spending money on those priorities, are we spending that money effectively, are we in the public sector... having a management cadre that both understands those priorities and has the capabilities to deliver and use the trillion rands that we speak of as effectively as they should?”

Investment in infrastructure and other capital projects still did not get as much money as it required and “even where we do have that money, regrettably we don't spend it as effectively as we should”.

The essence of spending the money budgeted was to ensure the appropriate levels of service delivery occurred and that millions of South Africans benefited from this.

“I'm sure a lot of that is happening effectively, but there is room for improvement as all of us would acknowledge as well.”

The key focus needed to be an evaluation as to whether spending resulted in a change in people's lives for the better.

“That should be the sole criteria in terms of evaluating our performance,” Gordhan said. - Sapa