The newly appointed minister of finance, Pravin Gordhan, sought to reassure the country and nervous investors on Monday in a press conference where he promised that “sound fiscal management” would be the ministry’s priority.
Gordhan was appointed to the position, which he previously held from May 2009 to March 2014, in a surprise announcement on Sunday night.
On Wednesday evening, President Jacob Zuma unexpectedly fired finance minister Nhlanhla Nene, replacing him with an unknown ANC MP, Des Van Rooyen.
On Sunday, Zuma moved Van Rooyen to the ministry of cooperative governance and moved Gordhan to the ministry of finance.
Gordhan hit the ground running on Monday, promising that discipline and financial prudence would be government’s priority.
“We are very aware that confidence and trust doesn’t get handed to one on a platter. It is something that one has to earn and something that one has to sustain over a period of time,” Gordhan told reporters.
Gordhan said the finance ministry’s focus over the coming months would be to “stay the course of sound fiscal management”. He added that the country’s expenditure ceiling was “sacrosanct”.
He said there would also be a focus on stabilising the country’s debt in the medium term.
Gordhan hinted that if the economy did not improve, government would have to hold back on spending or raise taxes.
“If needs be we will accelerate this by either cutting spending or making selective changes to our tax policy,” he said.
But this would not be done at the expense of the poor, Gordhan said, perhaps hinting that government would not cut social grants.
“… I want to be very clear. As a government we will not cut poor-pro programmes … We will seek to increase investment by the 2017 budget.”
He said government would take steps to curb expenditure in the public service and to tackle corruption.
Gordhan said one of the risks to the financial stability of the country was the financial state of state-owned entities.
“Let me emphasise that any support to these entities will be done in a fiscally sustainable manner. As President Zuma said, ‘No state-owned entity will dictate to government how it should be assisted.’ ”
He said work was under way to legislate state owned entities, and added that no steps to assist these entities would be taken unless they were financially viable. If not, expenditure would have to be cut.
He said government would seek to improve its relationship with the private sector, and said the country had a history of “sound macro-economic policy”.
Gordhan said growth was key to reducing inequality.