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Finance Minister offers little cheer regarding SA growth

Nhlanhla Nene’s budget policy statement leaves the door open on hiking VAT for the first time in 20 years.

Finance Minister, Nhlanhla Nene, delivering the 2015 MTBPS Speech in Parliament 21 October 2015. Picture: GCIS.

CAPE TOWN - Finance Minister Nhlanhla Nene has given his assessment of the state of the country's finances and the steps planned to get government debt under control.

His medium term budget policy statement offered little cheer.

Nene's message was clear: without economic growth, there's no revenue and without revenue, there's no more money to spend.

The sound of stun grenades used against protesting students echoed in the streets outside Parliament.

Demonstrators marched on Parliament yesterday while Nene delivered his statement.

The #FeesMustFall Campaign has been taken up at several universities around the country.

Students have been protesting for several days now over proposed fee increases.

Inside, Nene spelt out the bottom line, particularly the impact of the economy growing at only one and a half percent, rather than the two percent he forecast in his February budget.

"As a result of a slowdown in economic activity, gross tax revenue is revised down by R7.6 billion this year, and by R35 billion over the three year period."

To fill the gaping hole in the public purse, Nene will have to find the money elsewhere, including, possibly raising taxes.

His budget policy statement leaves the door open on hiking Value Added Tax (VAT) for the first time in 20 years and he also says he's asked for further advice on wealth taxes.

With the cupboard bare, students' demands for free tertiary education look unlikely to be realised any time soon.

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