Finance Minister Pravin Gordan said that the promise to consolidate the fiscus has been kept.
Minister of Finance Pravin Gordhan will be tabling the Mid-Term Budget Policy Statement (#MTBPS2016) in Parliament, Cape Town. Watch the livestream below:
This will be Gordhan’s maiden mini budget since his return to the finance portfolio last December.
At its second last meeting of the year in September, the Reserve Bank’s Monetary Policy Committee (MPC) said that while the bank has revised the country’s growth forecast up from 0% to 0.4% for 2016 following stronger-than-expected economic data for the second quarter, the domestic economy remains weak.
All eyes will be on Gordhan, as he is expected to announce how treasury will fund the university fees shortfall. Higher Education and Training Minster Blade Nzimande last month announced that fees for students, who qualify for funding under the National Student Financial Aid Scheme (NSFAS), and the “ missing middle“, would not increase in 2017.
Nzimande announced that universities will individually decide on fee increases for the 2017 academic year. However, the recommendation is that fee increases should not go above 8%. In a statement last month, treasury said it has been exploring different mechanisms of finding the money to pay for the subsidy. The mini-budget comes ahead of Standard and Poor’s credit rating review in December.
Rating agencies Fitch and Standard & Poor’s both have South Africa’s credit outlook at BBB- with a negative outlook, one notch above junk status.
Gordhan is expected to announce National Treasury’s views on growth prospects. On Thursday, the Minister will brief the Standing Committees on Appropriations and Finance and Select Committees on Appropriations and Finance on the 2016 MTBPS in Parliament.