Gordhan's shift to investment bodes well for the country
The Times Editorial: The main thrusts of Finance Minister Pravin Gordhan's Budget - the shift from consumption expenditure to investment - is exactly what the country needs if we hope to see any substantial growth in the economy, and, in turn, any real possibility of wide-scale job creation.
Gordhan has managed to keep the budget deficit surprisingly low due, in part, to less spending rather than more saving. Government revenue has, despite difficult economic times, remained surprisingly stable. However, these must be weighed against the fact that, as the financial demands of the country grow, the prohibitive costs of infrastructure development - an area of growing importance to government - will continue to rise.
Of some concern is the fact that, despite the backlog in infrastructure development, only 68% of the planned expenditure of last year was spent. This is a shame given the crippling backlog, and heads should roll.
Gordhan has made some positive changes, including tax alleviation for low earners, a promise to cut some red tape paralysing small business development and a focus on job-creation programmes. He's also tried to thwart outrage at the e-tolling system by making an allocation which will result in toll fees coming down. However, he has not acknowledged that the cost should be borne by government. This was not only evident in his retaining toll fees, but also in increased fuel levies.
He has managed to see to the needs of health, education and welfare, while still providing some tax relief, but has not adequately explained the funding of government's investment plans.
Gordhan has, however, recognised the link between the focus on growth and investment and poverty alleviation, and the creation of job opportunities for many South Africans. This should, in turn, become increasingly evident in government's fiscal priorities. But until that money is wisely allocated and spent, we will see no visible improvement in the lives of ordinary South Africans.