ALL eyes will be on Finance Minister Tito Mboweni on Wednesday when he makes his maiden medium-term budget policy statement in Parliament.
Not only will the former governor of the Reserve Bank be expected to demonstrate his commitment to inclusive growth and labour development but he will need to demonstrate fiscal discipline, to give confidence to investors, taxpayers and ratings agencies.
This is according to Deborah Tickle, a tax expert and lecturer at UCT, who argued that despite Mboweni being at the helm at Treasury, Treasury has to prepare a solid statement.
“As a new Minister of Finance he will need to show strength in supporting the 10 and subsequent six initiatives launched by the President by outlining in more detail how they will be funded,” Tickle said.
She said the fiscal discipline of previous ANC finance ministers would need to be reinforced so that the country’s debt levels would not be increased much above 50% of GDP (it is around 54% excluding guarantees), and tax would remain in the 25-27% of GDP level.
“He will need to give an indication of the action being taken with state-owned enterprises and their ongoing sustainability in order to show the drain they have become will be halted,” she said.
Tickle said Mboweni would need to give feedback in the light of the auditor-general’s report on Wasteful and Irregular expenditure (the PFMA and MFMA for 2017 again showed significant increases to a total of almost R75bn based on work completed) and his ongoing plea for action to stem the tide that has again increased and what action is to be taken as this will fill some of the gaps in the budget.
Also, expected to be noted in the statement by Mboweni would be how the proposed National Health Initiative and first-year free tertiary education bills are set to be met.
“Sadly, since economic growth is not what was expected when the Budget was announced in February, along with the issue of collections being behind due to late payments, I would expect a shortfall in the tax collections to date, thus, the minister needs to confirm that Sars is being turned around and that it can once again become the world class organisation it once was,” Tickle said.