Budget ‘blow-out’ slated by opposition
Cope has expressed concern about the increased borrowing and higher debt with debt costs expected to rise further.
The opposition is lambasting Finance Minister Malusi Gigaba’s budget “blow-out” plan, which entails government spending hundreds of billions of rands on servicing debt rather than on social services.
DA shadow minister of finance David Maynier said it exposed the full horror of President Jacob Zuma’s catastrophic mismanagement of the economy.
Referring to the budget deficit increase of R54 billion, he cited the implications for service delivery as the government would spend more on servicing debt than meeting the needs of the people.
The Congress of the People (Cope) said the minister’s medium-term budget policy statement (MTBPS) tabled in parliament yesterday lacked evidence of fiscal discipline and was more of the same, “with no major decisions to take us out of the morass that we find ourselves in”.
It showed rising expenditure in the face of anaemic growth and poor revenue collection, Cope spokesperson Glacier Nkhwashu said.
She added: “We didn’t cross the watershed. We didn’t see the brave leadership required.”
The national debt is expected to increase to more than 60% of GDP by 2022, resulting in higher debt service costs of up to R163.3 billion in the 2017-18 financial year, rising to R223.4 billion by 2020/21.
According to Maynier, there is no hope of the situation improving. Instead the budget “blow-out” would ricochet in the medium term.
But the ANC praised Gigaba for his “focused” and “people-centred” MTBPS.
The party said it inspired hope that government remained committed to financial management that would drive inclusive growth
“The ANC is particularly pleased by the minister’s assessment of the challenges, which hinder accelerated delivery as being a [result of] the slow pace or lack of implementation of our progressive policies,” ANC spokesperson Zizi Kodwa said.
The ANC also welcomed the plan to grow township and rural economies and strengthen governance at state-owned enterprises.
ANC caucus spokesperson Nonceba Mhlauli said the budget addressed the structural change of patterns of ownership, control, management and production.
“The financing of the policy choices reflected in the MTBPS is underpinned by the ANC government’s commitment to social and economic transformation,” she said.
Cope’s Nkhwashu also expressed concern about the increased borrowing and higher debt with debt costs expected to rise further.
“It’s clear that South Africa can no longer rely on the ANC to turn our declining fortunes around. They have no vision and no plan.” – ericn@citizen.co.za
