Finance Minister Malusi Gigaba says government needs to fast-track reform and make difficult, bold decisions in order to return the economy to a desirable growth path.
The Minister briefed the joint sitting of Select and Standing Committees of Finance and Appropriations in the National Assembly on Thursday.
When he tabled the Medium Term Budget Policy Statement on Wednesday, the Minister said a low economic growth and low tax compliance has strained the national purse with tax revenue collections being at concerning levels.
Over and above a revenue shortfall, he announced a risk of breaching the expenditure ceiling following the recapitalisation of the SA Airways and the SA Post Office. The government is selling a portion of its Telkom shares to avert the expenditure ceiling breach, with the intention of buying the shares back.
Briefing Members of Parliament at the joint sitting, the Minister said he gave a frank overview of the economic and fiscal outlook.
“One of the questions … has been whether we are detracting from what has been a path of fiscal consolidation and the answer is clearly no. We need to be concerned… that whereas both the global outlook as well as the Sub-Saharan outlook are positive, that the South African economy’s performance remains subdued,” he said.
In his mini- budget, the Minister announced that while economic growth has had to be revised downwards, government’s consolidated budget deficit was set to widen to 4.3% of the GDP this year – higher than the February Budget targeted deficit of 3.1% of the GDP.
