Commenting on the Medium-Term Budget Policy Statement delivered by Finance Minister Nhlanhla Nene in Parliament this afternoon, SEIFSA Chief Executive Officer Kaizer Nyatsumba said that the Government’s acceptance of the fact that, in the words of Minister Nene, “fiscal consolidation can no longer be postponed … [and that] the culture of doing more with less is required” was critically important for South Africa.
Mr Nyatsumba said while the country’s priority needed to be to grow the economy by ensuring that South Africa was more competitive internationally and attractive as an investment destination, it was to be welcomed that the Government appears to have come to the realisation that it needed to cut its cloth according to its size.
“Minister Nene and his team had to engage in a delicate balancing act. It now remains to be seen if the financial discipline, efficiency and responsibility correctly identified by the Minister will be evident throughout all tiers of Government, with all instances of corruption ruthlessly dealt with. Failure to act against those who do not implement these much-needed cost-saving measures can only undermine Minister Nene and his team,” Mr Nyatsumba said.
He also welcomed the Government’s continued commitment to the National Development Plan and its ambitious infrastructure development programme, but stressed the need for the Government, labour and business to work more closely together in the country’s best interests.
However, Mr Nyatsumba cautioned that the answer to generating the additional R15-billion required in the next financial year lay in making South Africa more business friendly and attracting new domestic and international investment, and not in increasing corporate and personal tax rates.