Parliament – Finance Minister Pravin Gordhan has heeded calls from President Jacob Zuma and unions to use the Budget to help transform the economy.
Presenting his speech in Parliament on Wednesday, he said the Budget gives effect to our transformation action agenda by financing government programmes that ensure more people live in dignity, there is a radical improvement in access to services, jobs are created and economic growth energised, and investment and development are increased.
The minister also noted that government will spend R1.5 billion over the next three years in procuring goods and services, but warned that government procurement would be carefully monitored so ensure there is value for money.
Read the full speech here
Gordhan's announcements follow the February 9 State of the Nation Address, in which Zuma called for the economy to be radically transformed.
Gordhan says a growing economy makes more rapid transformation possible, but it is the fiscal system that is the most direct vehicle for redistribution and inclusivity.
“The South African Budget finances the construction of houses and schools, the education of young people, care for the elderly and incomes of the most vulnerable. About two-thirds of the Budget is dedicated to realising social rights.”
The minister noted there are programmes that build infrastructure, support new businesses, empower small farmers, develop human capabilities and incentivise job creation.
“The Budget is highly redistributive to poor and working families. It also redistributes substantial resources from the urban economy to fund services in rural areas.”
In collaboration
However, he notes, budgets alone cannot achieve transformation goals.
Gordhan says SA needs a powerful combination of:
• Effective and targeted government delivery of economic programmes,
• An energetic coalition with labour, business and civil society,
• A consensus on a transformation programme – with each of us clear about the contribution and sacrifices we have to make to ensure optimal inclusivity,
• A commitment to eradicate gross inequality and share the benefits of growth and restructuring of the economy.
“Government can be an important catalyst. But it cannot carry all of the responsibility for ensuring that every citizen experiences a palpable change in wealth, dignity and well-being. This has to be our collective choice,” says Gordhan.
Gordhan also notes there are five critical priorities in which government is committed to work with the private sector and social stakeholders to propel inclusive growth:
• Improved education is a central priority, and particularly the quality of basic literacy and numeracy achieved in the first phase of schooling. We must increase funding for proven interventions.
• Reform of technical and vocational education and training programmes is vital, so that they effectively meet occupational and industrial needs. We must strengthen collaboration between employers and TVET colleges.
• We must accelerate development of our cities, housing investment, improved public transport and urban enterprise and industrial development.
• South Africa’s integration and linkages with its regional neighbours offers significant opportunities for enterprise growth, agricultural development and new industrialists.
• Reform of domestic market structures, promotion of competition, deconcentration of monopolised industries and greater private-sector participation in sectors dominated by public enterprises: these are structural reforms that will bring opportunities for business development, modernisation and a more balanced distribution of wealth and opportunities.