/ 11 February 2009

Parties welcome Manuel’s budget

Finance Minister Trevor Manuel’s 2009/10 budget tabled in the National Assembly on Wednesday has been broadly welcomed by political parties.

The Democratic Alliance commended Manuel’s brave decision to stick to his considered and responsible fiscal policy approach in this global economic environment, and hoped the incoming administration heeded his warning not to deviate from his current prudent course, spokesperson Kobus Marais said.

However, it was disappointing that, in the midst of a crisis of mismanagement and underperformance in countless local governments, in public institutions such as the Land Bank, and across much of the education system, for example, there remained too little focus on performance, delivery and accountability for the large sums of money that had been allocated.

”While Manuel lambasted many individuals and departments for poor performance, there was very little in the way of specific measures to confront this.”

In presenting a budget that had clearly been constrained by the international economic environment, Manuel had taken a necessary counter-cyclical approach in announcing a deficit of 3,8%, Marais said.

Narend Singh of the Inkatha Freedom Party (IFP) especially welcomed the move to a 3,8% budget deficit, saying it was necessary in the current economic climate.

However, the IFP would have liked greater stimulus to prevent job losses through retrenchments and downsizing.

Phillip Dexter of the Congress of the People said there was little in the budget that was surprising.

However, it should be pointed out that the contradiction between Manuel’s continued conservative approach and the populist rhetoric of the leadership of the African National Congress was a stark one, Dexter said.

African Christian Democratic Party spokesperson Steve Swart supported what he called a ”stimulatory budget in tough economic conditions”.

”We are somewhat surprised at the size of the budget deficit. However, it amounts to a counter-cyclical fiscal stimulus to the economy.

”We doubt whether such a large budget deficit is sustainable in the long run,” he said.

Jackson Bici of the United Democratic Movement recognised that the current international and domestic economic environment was challenging, and welcomed the effort by government to produce a balanced budget.

”The budget has good elements and bad elements,” he said.

The South African Communist Party also welcomed the major thrust of the budget.

”It is a budget that has had to be developed in the midst of the most serious economic crisis of the global capitalist system since the early 1930s,” the party said.

Speaking in the National Assembly earlier, Manuel said speeding up growth, reducing poverty and creating more jobs for more people remained the main aims of government’s economic policy.

He announced, among other things, a sharp rise in fuel levies, tax relief for individuals to the tune of R13,6-billion, and increased spending on social and infrastructure development. — Sapa