Gigaba urges business to help boost economy

Finance Minister Malusi Gigaba has again thrown down the gauntlet to business and social partners‚ saying they should meet government half way in order to move the economy forward.

Fresh from his medium-term budget policy statement‚ Gigaba told a Durban Chamber of Commerce and Industries-organised CEOs’ breakfast briefing on Tuesday that he had given an honest view of the challenges facing South Africa’s economy.

He delivered his rather gloomy mini budget speech in the National Assembly a week ago‚ painting a picture of a country in dire need of economic upliftment.

Gigaba said it was not in the public interest‚ nor that of government‚ to sugar-coat the economic climate and the challenges ahead.

“It is only when we understand these challenges fully and candidly that we will know what to do. That we will know what trade-offs must be made in the public interest‚” he said.

Gigaba said the government could have simply pretended as if things were fine and walked away.

“It’s one thing to say to people that times are tough and walk away. It’s another thing to say we need to do something and be pragmatic about it … something that goes beyond the ideological claptrap‚” he said.

“The statement we made last week (does) not boost confidence. We could go and spin ourselves to no end but the actual fact is that the numbers do not tally.

“The period of tax buoyancy may have come to an end … I couldn’t go to parliament and lie‚” he said.

He acknowledged that the government was not collecting as much tax and that there were a number of factors responsible.

Industries shutting down and increasing unemployment were drivers of the trend.

“No minister of finance worth their salt could have presented the statement any different‚” he said.

Gigaba said his message was for government and business to act together.

“Let nobody be defensive. We need to act together. Not this I give you take‚ but I give you give. By that we will unlock private sector investment‚ we will give each other incentives and [ultimately] create trust‚” he said.

Turning to rands and cents issues‚ Gigaba said the continued sluggish economy would force the government to eventually scale down on social and infrastructure spend.

“We have had to revise our fiscal expectations downward but think beyond the present moment‚” he said.

He said that government spend on infrastructure was nearly a trillion rand at R800-billion across all three spheres of government.

Gigaba conceded that with such low and negative economic growth there was very little social and economic transformation expected.

“It is economic growth that creates employment and economic growth is good for social stability‚” he said.

Gigaba was sanguine though‚ saying while “we are in a difficult situation‚ but we can get out of this”. He urged against polarising relations and destroying bridges between government and the private sector.