Finance Minister Pravin Gordhan has given the clearest indication yet that next week’s midterm budget will contain no surprises, good or bad.
Gordhan – speaking yesterday to Uasa union members in Boksburg – said the fiscus would continue to be constrained by virtually no economic growth this year.
And with low growth affecting the amount of revenue the fiscus is able to generate, there would equally be no more money to give out.
Gordhan’s mid-term budget speech is likely to be one of the most watched speeches he has given yet – largely as a result of the ongoing scandal surrounding the National Prosecuting Authority’s decision to charge him with fraud.
An affidavit submitted by Gordhan in a separate case involving the influential Gupta family has also increased the focus on him, domestically and internationally.
On Friday, Gordhan fired a salvo at the family – and indirectly at President Jacob Zuma – by submitting an affidavit to court in which he detailed R6.8-billion in suspicious payments made through Gupta-company accounts.
Gordhan wants the high court to rule that the Treasury has no power to mediate on behalf of Gupta-owned companies with banks which have refused to do business with the brothers.
Yesterday, the family hit back at Gordhan, saying his court case was unlawful.
It is widely believed that Gordhan is involved in a low-level war with Zuma, who has close links to the Guptas, in what has been termed a state-capture crisis.
However, the finance minister said yesterday he had a good relationship with Zuma.
“He is my president, so I have to have very good relations with him,” Gordhan said.
He said South Africa was making progress towards preventing a sovereign credit downgrade.
“When you have low growth, you have low revenue , ” Gordhan said.
“When the packet of money [available to you] is limited, you have to make tough choices.”
“We have to understand that with low growth, we don’t have fiscal resources to play with.”
But Gordhan said the nation needed to make some tough decisions in the short term to create room for future growth.