SA 'dare not relax' to get finances on the right track
South Africa “dare not relax” amid the improved sentiment so that public finances can be returned to a sustainable path‚ according to deputy finance minister Mondli Gungubele.
Speaking at a public financial management (PFM) conference at Gallagher Estate on Wednesday‚ Gungubele said: “Despite an improvement in the outlook and a reprieve from credit ratings agency Moody’s at the end of March‚ we dare not relax and allow the things that [took] our country to the precipice to prevail.”
He explained that growth prospects have been revised in the right direction and there has been positive reaction to the country from investors‚ but the most vulnerable in society remain exposed when governance structures are weak. "President Cyril Ramaphosa has ushered in a new dawn and asked all of us as citizens to embark on a path to restoring our country‚” he said.
SA has made strides since the medium-term budget policy statement when South Africa’s debt rocketed to 60%‚ he said. “Confidence was low‚ investment was stifled‚ instability was the song of the day and confidence [was] waning day-by-day.”
The 2018 budget demonstrated a stronger fiscal framework‚ he added. “When we adopted the budget this year‚ we looked at a fiscal framework that seeks to demonstrate to South Africans and the broader investor community that we have a clear intention to climb a new hill.”
“Our fiscal framework was adopted to ensure that our public finances are returned to a sustainable path.” He added that in that context‚ some tax adjustments had to take place‚ particularly around VAT.
Gungubele added that by 2021‚ Treasury expects to revise expenditure down to 52% debt to GDP and reduce the budget deficit from 4.1% to 3.5% based on the growth outlook and the fiscal interventions to curb the expenditure ceiling.