Johannesburg - Parties in Parliament have urged Finance Minister Pravin Gordhan to stick to the fiscal consolidation path and avoid blowing the budget when he tables his Medium-Term Budget Policy Statement tomorrow.
The opposition said yesterday that despite slow economic growth, Gordhan must cut wasteful expenditure to avoid a downgrade in December.
Gordhan will table the MTBPS at a time when the rating agencies are expected to come to South Africa early next month to conduct another review before announcing the results in December.
The National Treasury, the World Bank, the International Monetary Fund and the South African Reserve Bank have all projected less than 1 percent economic growth this year.
DA MP David Maynier said the party was expecting the announcement of structural reforms in the economy to boost growth. It wanted the minister to stick to fiscal consolidation, the deficit to be at 3.2 percent of gross domestic product (GDP) and zero-fee increases for university students to be announced.
IFP chief whip Narend Singh said his party expected Gordhan to walk a tightrope in the MTBPS because of slow economic growth and political instability.
He said business would have to come to the party.
“Business is sitting with large sums of money on their balance sheets, billions of rand. We need the R600 billion they are sitting on to invest in infrastructure development.”
Singh warned the country needed to do more to avoid a downgrade to junk status.
African Christian Democratic Party MP Steve Swart said the party wanted Gordhan to cut government expenditure.
“The key thing for us is to ensure the minister keeps the expenditure where it is and addresses corruption,” said Swart, adding that the budget deficit mustn’t rise above 3 percent of GDP.
The ACDP was concerned about the country’s slow economic growth.
“If he speaks to the fiscal consolidation path, he will allay fears of a downgrade,” he said.
Meanwhile, it has been said that the fraud charges against Gordhan smacked of intimidation, harassment and the furthering of a vendetta against him. The urgency of the matter could thus not be overstated, particularly in light of the potential prejudice to the country and the irreversible consequences that may arise by virtue of Gordhan’s illegal prosecution.
This is according to Helen Suzman Foundation director Francis Antonie in papers filed at the high court in Pretoria.
He said the case by the National Prosecuting Authority (NPA) against the minister was hopeless and the charges were politically motivated.
The foundation and Freedom Under Law are due to ask the court to declare the decision taken by National Director of Public Prosecutions advocate Shaun Abrahams and the NPA to charge Gordhan with fraud, alternatively theft, to be set aside and declared illegal on November 8.
The application is expected to be heard by the high court a week after Gordhan and his co-accused, Oupa Magashula and Ivan Pillay, have appeared in the lower court.
Antonie said it was telling that the charges included a new subject matter.
He said the NPA was relying on different facts to the well-published charges which had been investigated by the Directorate for Priority Crime Investigation for months.
The charges against Gordhan and his co-accused relate to Pillay’s early retirement. Antonie said Pillay’s retirement was perfectly acceptable in law.
“Despite the charges clearly being bad in law and incapable of being prosecuted, the NPA was afforded the opportunity to withdraw the charges or furnish reasons for its decision [to prosecute). It did neither.
“The conclusion is that the charges are baseless.”
Antonie further stated the timing of the charges was worrying, as the facts on which the NPA relied in drawing up the charge sheet had been in the public domain for almost six years.
He said the matter was urgent especially as the uncertainty over Gordhan’s future was causing political and economic instability.
We'll have you covered for all the relevant budget news on the big day; pick up a copy of Business Report on October 27 for analysis and insight.