The medium-term budget statement, to be delivered in 10 days, is crucial for those hoping it will send the right message to ratings agencies, and equally critical to those who want greater influence over spending priorities. Finance Minister Pravin Gordhan was adamant on Friday that he would present the address and the National Treasury confirmed the date. Also on Friday, director-general Lungisa Fuzile said: "We work on the basis that the 26th will happen and we've got no reason whatsoever to doubt that."But the events of this week, in which the National Prosecuting Authority said it would charge Gordhan with fraud, have raised concern over how long he will be in the post and whether a new minister will be in place for the medium-term budget statement.The National Treasury has been under sustained attack. Fuzile said the attacks were due to "some of the work that the Treasury does and the chief procurement officer has made many people unhappy and the question this brings to my mind is whether this is their way to fight back".The medium-term budget statement is more significant than the February budget in the sense that it prioritises spending over three years. This year's will include 2019, the year of the next national election.story_article_left1Economists said the scope to amend it is wide open up until the night before it is delivered, and the fear is that ploys to remove Gordhan would enable a new minister to change spending priorities.The events of this week echo the tumultuous four days after the sacking of former finance minister Nhlanhla Nene on December 9 last year.In those four days, Nene's replacement, Des van Rooyen, was allegedly asked to review documents that would have increased guarantees for troubled state airline SAA.Economist Lumkile Mondi said a recent announcement by Energy Minister Tina Joemat-Petterson that Eskom would take responsibility for the government's nuclear plan suggested that the ploy to get rid of Gordhan was linked to adding further financial guarantees for Eskom."The Treasury has been very, very uncomfortable with a nuclear programme. The economy is not doing very well. We suspect these attempts could have been part of a bigger ploy of sneaking in a number of programmes in the next two to three years. That will undermine other priorities," Mondi said.Former finance minister Trevor Manuel said this week this particular period just before the medium term "is more intense even than the week before the budget in February".Over the next few days, the Treasury would enter lockdown to focus on determining an adjusted estimate in which the impact of disasters such as the nationwide drought, floods, shortfalls in education and healthcare, as well as overruns in the pay negotiations are incorporated. How the government will pay for these adjustments would also be debated.Fuzile said that most decisions relating to the budget had been taken, but minor loose ends needed to be tied up.Two weeks ago, Deputy Finance Minister Mcebisi Jonas, Treasury officials and premiers met in Pretoria to consider the framework and decisions that needed to be taken in the run-up to the medium-term budget statement."Those high-level decisions have been taken, save for marginal tweaks," said Fuzile, who would not comment on the nuclear programme.Economist Iraj Abedian said: "If the National Treasury and cabinet get it wrong then they will give the ratings agencies no option but to downgrade."story_article_right2There is little optimism among observers about the government's ability to deliver on its fiscal targets.Abedian said "the fiscal space for the government has become less, not more, to the extent that the economy has shrunk, revenue has become less", even though part of the problem was weaker global economic growth.The IMF recently cut South Africa's growth forecast to 0.1% for this year and the Treasury was expected to revise its 0.9% forecast downwards, far below the 1% ratings agencies have set.Budget items already committed to in previous years cannot be removed and replaced with other items, he said.If the wrong decisions were made, South Africa would slip into recession, Abedian said. While it was already in difficult economic waters, things could become even worse.Ian Cruickshanks, economist at the IRR policy think-tank, said South Africa risked a downgrade, which would result in less investment, less profit for companies and less revenue for the government.This would limit its ability to spend on services, and raise the possibility of a recession. "It's difficult to avoid the feeling that there is a deliberate attempt to undermine the authority of the finance minister," Cruickshanks said...