Steven Tau
1 minute read
24 Feb 2016
2:28 pm

‘SA strong enough to overcome economic challenges’

Steven Tau

"We can address declining confidence by working together as a united nation."

Minister Pravin Gordhan delivers the 2014 Budget Speech in the National Assembly in Parliament, Cape Town. (Photo: GCIS)

South Africa is strong enough and creative enough to overcome the economic challenges it faces, Finance Minister, Pravin Gordhan said on Wednesday afternoon.

Delivering the budget speech, Gordhan said what is needed is not just words, but action.

“We can address declining confidence by working together as a united nation, black and white.

“What we should do in addressing these challenges, is to deal with corruption and wasteful expenditure and stop the bailing out of state-owned entities,” he said.

He stressed that the country cannot spend what it cannot afford.

Higher education, grants and drought emergency relief, was on top of government’s agenda.
An additional R16 billion is allocated to higher education over the next three years, funded through reprioritisation of expenditure plans.

“Taking into account projected increases in the cost of living, R11.5 billion is added to social grant allocations over the next three years.

“Funds have been reprioritised to respond to the impact of the drought on the farming sector and water-stressed communities,” he said.

Gordhan said the budget was guided by the National Development Plan (NDP).

“Against the background of slow growth, rising debt and higher interest rates, the pace of fiscal consolidation will be accelerated, and the budget deficit will be reduced to 2.4 per cent by 2018/19.

“The expenditure ceiling is cut over the next three years by R25 billion, mainly by curtailing personnel spending,” Gordhan said.

He said tax increases to R18 billion in 2016/17 are proposed, and a further R15 billion a year in 2017/18 and 2018/19.

To get a full analysis of Minister of Finance Pravin Gordhan’s budget speech, get your copy of The Citizen at your nearest news agent tomorrow.

Expenditure cuts, tax hikes to cut budget deficit to 3.2%