Gordhan’s mid-term budget ‘calm and measured’‚ say economists and analysts

Finance Minister Pravin Gordhan flanked by his deputy, Mcebisi Jonas Picture: Ruvaan Boshoff
Finance Minister Pravin Gordhan flanked by his deputy, Mcebisi Jonas
Picture: Ruvaan Boshoff

Finance minister Pravin Gordhan’s mid-term budget was warmly received by economists and political analysts‚ who described it as “calm and measured”.

But least one economist raised concerns about the raising of taxes and poor implementation of government programmes and the government’s high wage bill.

“I think we are getting close to a situation where we will not meet any target. We have a downward growth forecast. Secondly‚ the country’s debt to GDP (ratio) they said four years ago that it won’t exceed 38%. It’s now sitting at 48 percent‚” said economist Mike Schussler.

He said South Africa needed to take a “relook at itself”.

“Every time we get to this place‚ we get tax increases and the middle and top are getting squeezed. They (middle class) are not getting back what they should be getting back‚” said Schussler.

He said a majority of people have become “punch drunk” with all the tax.

“That’s a big concern of mine. We’ve had almost R43 billion in tax increases‚” said Schussler.

Political analyst and public law associate professor at University of Cape Town‚ Richard Calland‚ said Gordhan was well received from across the board.

“It was interesting at the end‚ virtually the whole of the horse shoe rose to their feet to applaud him. This demonstrates he’s got cross party support who understand his predicament. They respect him. The ANC were warm towards him. Not overwhelmingly so‚ but they were warm‚” said Calland.

Gordhan could not have asked for a better reception in parliament when he received a rare standing ovation from not just his ANC colleagues‚ but from opposition MPs and the public‚ even before delivering his medium term budget policy statement.

Calland said given the “constraints” Gordhan faces politically‚ he probably did as much as he could.

“He also went out of his way importantly‚ to the student movement to tell them that he’s listening‚ not just by his speech‚ but his extraordinary gesture beforehand and that indicates that he’s taken a strong leadership position in this government‚” said Calland.

Calland said the speech was what he expected and what the country needed.

“It was calm‚ measured‚ it was confident‚ it revealed the fiscal constraints that the country faces which are significant and next year’s budget is going to be very tough. It’s going to be even tougher if we’re downgraded by the ratings agencies‚” said Calland.

Cosatu spokesman Matthew Parks said that while the union welcomed many of the positive aspects of the speech‚ they did “see it being sufficient to stimulate economic growth” and questioned how it would solve the country’s “36% perennial unemployment crisis”.

“We remain concerned that the demands of ratings agencies reign supreme over those of the 8 million unemployed South Africans‚” Parks said.

The Democratic Alliance’s David Maynier also questioned the speech’s impact for the unemployed.

“The medium-term budget policy statement was a major blow for the 8.9 million people who do not have jobs‚ or have given up looking for jobs‚ and do not have hope in South Africa‚” said Maynier.

– TMG Digital/Parliamentary Bureau

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