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Praise for Gordhan's medium term budget

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Praise for Gordhan's medium term budget

by BuaNews Online
27 Oct 2010
BuaNews Online
BuaNews Online

Finance Minister Pravin Gordhan's Medium Term Budget Policy Statement (MTBPS) has been welcomed by some economists and business, who said there were a lot of positives to be taken from it.

Gordhan tabled the MTBPS in Parliament on Wednesday.

The policy statement touched on government's New Economic Growth Path; proposed harsh penalties to curb fraud and corruption; outlined government's commitment to help provide jobs and pledged an extra R100 million to help fight HIV and Aids, among others.

"It is certainly more upbeat than the budget speech in February," said Isaac Matshego, an economist with Nedbank.

Matshego highlighted the increase in government revenue -- which grew from 27.2 percent of GDP (R666.9 billion) to 28.4 percent (R761 billion) in the current financial year -- as one of the encouraging features of the policy statement.

GDP growth, which was expected to come in at 3 percent for this year, higher than expected, was also welcomed.

On the New Economic Growth Path, Matshego said it followed on the policy action plan and was a move in a positive direction.

"The challenges facing South Africa's economy are being addressed. The growth path targets sectors such as manufacturing, where employment creation is likely to come from," he added.

Chose Choeu, president of the South African Chamber of Commerce and Industry (SACCI), welcomed the commitment made to combat fraud and corruption through more effective and efficient financial management and governance.

Choeu was also pleased with the delivery agreements and strategic plans for government entities.

He further applauded the commitment to infrastructure such as transport, electricity and communications, all of which would support the business environment.

However, Choeu acknowledged that all of this unfortunately came at a cost to the public sector debt through an increase in tariffs and user fees.

SACCI also welcomed the relaxation of exchange controls and investment limits, as well as the minister's undertaking to improve service delivery.

"We are concerned about our inability to achieve targets on critical health matters, provide quality education to our children and reduce the level of unemployment," Choeu added.

SACCI also called for government's efforts to strengthen regulation in the financial sector, characterised by greater effectives but less bureaucracy and red tape. - BuaNews

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