Pretoria – The 2015 National Budget tabled last week contributes to important changes underway that will place the economy on a more solid foundation for sustainable growth in the future.
This is according to Finance Minister Nhlanhla Nene, who was speaking in Sandton, in Johannesburg on Tuesday.
He said the interventions underway included a shift from a growth path reliant on consumption to one led by investment and the implementation of major investments in backbone infrastructure to enhance productivity.
Other interventions include strengthening incentives for tradable sectors with significant potential for job creation and facilitating the transition to a less energy-intensive economy; investing in cities to reverse inequitable and inefficient patterns of human settlement; and reforms and regulatory changes, and a strategic review of state owned entities, to raise long term growth potential.
“The 2015 Budget presents a story about making the right choices in order to change the trajectory of our economy and society.
“In short, this 2015 budget is about narrowing the budget deficit; improving the quality of spending; reducing constraints on the economy; and continued support for programmes that benefit the poor the most,” said the Minister.
Government, he added, needed to narrow the budget deficit.
“Slow economic growth means that the economy does not generate enough tax revenue needed to close the gap between revenue and expenditure. And to continue borrowing more money would jeopardise the sustainability of public finances,” said the Minister.
He said interest payments will consume R420.8 billion over the next three years. “As the custodian of public finances, government must therefore take carefully considered steps to narrow the budget deficit.”
Government will undertake to reduce the expenditure ceiling of R25 billion over the next two years. “This is not the same as cutting expenditure. It is about slowing the pace of expenditure growth,” explained the Minister.
He said other steps include an increase in taxes of R17 billion in 2015/16, interventions to improve the composition and quality of spending - including reducing wage bill growth - and a commitment to the funding of state-owned companies in a manner that doesn’t add to national government debt.
“As a result of the consolidation package, national debt stabilises at 44 % of GDP in 2017/18.”
Government was also working towards improving the quality of spending. – SAnews.gov.za
