South African taxpayers will be given some idea on Wednesday afternoon of the cost of the 2010 Soccer World Cup, Deputy Finance Minister Jabu Moleketi said on Tuesday.
He was speaking ahead of Finance Minister Trevor Manuel’s unveiling in Parliament of the mini-budget, which revises the government’s three-year spending plan.
The mini-budget will take the plan up to March 31 2010, only months before the opening of the soccer spectacular.
”Tomorrow [Wednesday] we’ll begin to know how much has been set aside specifically for 2010,” Moleketi said.
”So all the resources that will be spent on 2010 in terms of infrastructure, ranging from stadia, supporting infrastructure, roads, as the minister of transport has said, and all other infrastructure, will be contained in that budget.
”To a large extent South Africans will have a good idea of how much is going to be spent.”
Moleketi, who was speaking to journalists after attending a day-long ”kick-off” organising workshop hosted in Cape Town by Fifa and the 2010 Local Organising Committee, said the costing would reflect a ”very, very realistic approach”.
It took escalation and a whole range of other factors into account.
He also said the mini-budget would be good news.
”The minister of finance has a tradition of delivering good news, so this is not going to be an exception.”
It would indicate South Africa’s seriousness in its intention to deliver an outstanding and world-class event.
Jerome Champagne, who is Fifa president Sepp Blatter’s ”special affairs delegate”, said in reply to journalists’ questions that Fifa had no concerns at all about the pace of stadium planning and construction in South Africa.
He said Tuesday’s workshop, which was opened by President Thabo Mbeki and attended by the ministers of sport, transport, safety and security, and environment affairs and tourism, had further boosted Fifa’s confidence in the country.
”Practically speaking, South Africa is not behind schedule,” he said.
Replying to a question on crime and its effect on the tournament, Safety and Security Minister Charles Nqakula said a number of serious criminals had recently been brought to book, and this would continue.
”We shall drastically reduce the levels of crime in South Africa,” he vowed.
In his February budget speech, Manuel said government would spend up to R5-billion in dedicated infrastructure for the competition, of which R3-billion was set aside over the next three financial years.
On Tuesday, Democratic Alliance finance spokesperson Ian Davidson said in light of the large revenue overrun at the end of the previous financial year, he expected Manuel would focus the medium-term budget policy statement on increased infrastructure roll-out and paying off debt.
While acknowledging the need for infrastructure, spending on new bulk infrastructure beyond what was already envisioned could increase the current-account deficit and place greater upwards pressure on inflation, thus jeopardising further growth.
South Africa already needed to massively increase the flow of fixed direct investments into establishing new export-oriented manufacturing concerns to counteract the faster-growing value of imports.
Manuel would be missing a golden opportunity if he did not balance government’s infrastructure spending with a stimulation package for the supply side of the economy, which also encouraged domestic savings.
”In this regard, corporate tax cuts are key,” Davidson said.
Similarly, Solidarity trade union economist Lullu Krugel urged Manuel to focus on boosting the supply side of the economy — business — by cutting the corporate tax rate.
”This should already have been done in February,” she said.
Krugel did not expect any further reduction in personal income tax, as it would further raise demand and add to existing inflationary pressures.
”We want the focus to be on the supply side of the economy, because of the fact that it still has capacity to expand and if there is to be continued economic growth in years to come, it should result from business and from infrastructure development.
”Supply side expansion would probably alleviate inflationary pressures as well as the deficit on the current account of the balance of payments,” Krugel said.
The Federation of Unions of South Africa (Fedusa) also urged higher spending on fixed investment infrastructure projects.
”South Africa needs more hospitals, better public transport systems as pointed out by Parliament’s transport committee.
”The 2010 Soccer World Cup will place serious strain on our transport systems,” the federation said in a statement.
Most of the room created by the tax revenue overrun should be made available to the economy at large by tax cuts to employees and small businesses, and grants. – Sapa