‘It's hard to have redistributive budget when times are tough’
ANC MP Yunus Carrim has welcomed allocations to social spending, youth development and higher education.
CAPE TOWN – African National Congress (ANC) MP and chairperson of the Standing Committee on Finance, Yunus Carrim, acknowledges it’s difficult to have a redistributive budget when times are tough.
Responding to Finance Minister Malusi Gigaba’s Medium Term Budget Policy Statement, Carrim has welcomed allocations to social spending, youth development and higher education.
But he is concerned by how much it’s going to cost to service the country’s debt.
“Obviously there’s a concern about 15% of our budget being consumed by debt servicing by the outer year of the MTEM. So, more than ever we have to focus on the quality of spending, the efficiency of the spending, on value for money and tackling wastage and corruption.”
Carrim says government can’t afford to repeatedly bailout ailing state-owned entities while non-performing managers aren’t held accountable.
“We simply cannot afford to constantly bailout ailing state-owned entities which are badly governed, allow for corruption and some of the board members and managers themselves are accused of corruption.”
EXPLAINER: #MTBPS2017 - The state of our finances
Meanwhile, Gigaba has warned of tough times ahead for South Africa’s economy, saying the challenges have to be confronted head-on and cannot be sugar-coated.
Delivering his inaugural Medium-Term Budget Policy Statement in Parliament, Gigaba said the tax revenue shortfall is R50.8 billion, and that this has severely eroded the country’s financial position.
This is the biggest drop in revenue from VAT, personal and corporate taxes since the 2009 financial crisis and represents a gaping hole in the budget.
Malusi Gigaba's Medium Term Budget Policy Statement 2017
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Additional reporting by Gaye Davis.
(Edited by Zamangwane Shange)