Cape Town - Deputy Finance Minister David Masondo said the country’s economic future would be firmed up when Finance Minister Enoch Godongwana tables his main Budget policy in February.
Addressing a joint meeting of parliamentary finance and appropriation committees on Tuesday, Masondo said last week’s medium-term budget policy statement (MTBPS) was meant to give the nation an update on some fiscal framework implementation.
He also said it was aimed to report on revenue, debt levels and, more importantly, economic growth.
“It was to present the immediate future – how it looks like and how we intend to position the government.
“That future will be firmed up in February when the minister comes back,” he said.
Masondo said between now and February, the government would deliberate on the most appropriate priorities that would be targeted, with an emphasis on job creation, poverty alleviation, peace and security.
“This process will also include an assessment of the opportunity for policy trade-offs and will maintain fiscal sustainability.”
Masondo noted that South Africa was continuing in its battle against the impact of Covid-19 and socio-economic challenges – inequality, unemployment and poverty - made worse by the pandemic.
The unemployment rate has reached 34.4%, and the country’s debt has now reached R4.3 trillion this year, with debt service costs totalling R303 billion.
“You can imagine if we did not have debt. This R1 trillion should go to education, health and other important expenditure items.”
However, Masondo said high debt was not in the interest of economic growth and the poor.
“Fiscal consolidation is critical to reduce the public debt burden, restore investor confidence and avoid domestic and global risks.”
He also said the MTBPS proposes to maintain restraint in public expenditure, saying the government won't commit to long-term spending as a consequence of the good performance of the mining sector.
Masondo said, over the next three years, the government would balance the support for economic recovery and reconstruction through rebuilding short term public finance and structural reforms.
He also said the government had increased the licensing requirement for energy supply to the economy with municipalities to generate power from Independent Power Producers and through Operation Vulindlela, which will improve incentives for efficiency and competitiveness of the rail sector.
The deputy minister also said e-visa would be rolled out to 15 countries by March.
Masondo said Operation Vulindlela would monitor the implementation of these reforms and that there were others that were being identified.
“At the right time, we will come to the committee and articulate those reforms. As we make advances in certain reforms, we want to move to others so that we really unleash the economic potential. Growth is critical if we deal with all challenges we are facing,” he said.
Masondo tendered the apology of Godongwana, who could not attend the meeting after last week’s meeting was postponed at the request of the department.
“He could not make it today and also apologised for the postponement of the meeting that was supposed to take place last Thursday.
We really would like to apologise and hope you will accept the minister’s apology, which is also beyond his control,” he said.
But, DA MP Dennis Ryder said he was really unimpressed by Godongwana’s apology and the fact that he could not attend the meeting for the second time.
“We had to adjust our programme because of last week’s postponement of the meeting and the minister not being here today. It leaves a bad taste in one’s mouth. It is his first budget experience. For me, it is unforgivable,” Ryder said.
ANC MP Xoliksile Qayiso came to the defence of Godongwana.
“We appreciate that we have been given a detailed reason for the absence of the minister. It would be unfair to condemn it,” Qayiso said.
His colleague Zola Mlenzana said they could not do otherwise when Godongwana was challenged with ill-health.