Political parties on Tuesday congratulated Finance Minister Pravin Gordhan on a positive budget and said he passed his first test.
The ANC was impressed with the government’s ”looking at carefully borrowing to fund government expenditure”.
”Also impressive is the emphasis on prudent spending and accountability by all public servants and public representatives at all levels of our system of government,” the party said in a
statement.
”Whereas in other parts of the world spending is being cut and projects cancelled, we are able to continue our investment plans because we entered the economic downturn with a budget surplus and a healthy fiscal position.”
Democratic Alliance MP Dion George said: ”In general we welcome the minister’s renewed focus on job creation and his hard line on inflation, public sector wage increases and infrastructure bottlenecks.
”Minister Gordhan has passed his first test.”
The budget showed the global financial crisis had a much worse effect on the economy than previously thought.
”Structural rigidities in our economy generally, and specifically in our labour market, worsened the impact once the crisis hit.”
The DA welcomed the announcement that transfers to state owned entities had to be trimmed.
There were number of items on which Gordhan’s hand was forced ”due to a combination of bad judgement, poor management and incompetence”.
These included the R589-million spent on new government departments, the R200-million transfer to the South African Broadcasting Corporation, the R1-billion rand capital assistance to the Land Bank and R192-million for a deal with Airbus.
Independent Democrats MP Lance Greyling said Gordhan had shown the right amount of discipline in dealing with the economic crisis.
”We are particularly pleased that the minister is taking a tough stance against corruption and wasteful expenditure.”
A concerning factor for the ID was the large budget deficit of 7,6%, which was unsustainable over the long term.
”Considering that it is uncertain whether the global economy will in fact recover over the next few years, the budget deficit needs to be watched very carefully.
”We are pleased, however, that the minister has not compromised on assistance to the poor.”
Freedom Front Plus MP Pieter Groenewald said Gordhan showed a ”realistic approach” and that he was in charge of economic policy.
”Generally speaking the minister has a more realistic approach, especially his forecast that the growth rate will be 3,2% over the next three years.
”The debate as to whether the government is moving more to the left with [Economic Development] Minister Ebrahim Patel at the head, or more to the right with [Planning Commission] Minister Trevor Manuel in charge is actually irrelevant as this budget is an in-between, Gordhan-managed budget.”
The possibility of broadening the tax base would have to be looked at very seriously, as seven million taxpayers could not keep on paying for 50-million people, he said.
Is was disconcerting that the percentage of government lending would increase from 23% to 41% of GDP in the next three
”Money which is borrowed has to be paid back with interest and it will be the taxpayers who will have to foot the bill,” he said. – Sapa