By Neo Semono
Cape Town – Members of Parliament have responded to Finance Minister Nhlanhla Nene’s inaugural Medium Term Budget Policy Statement (MTBPS), which he tabled in Parliament on Wednesday.
The MTBPS, also known as the mini-budget, saw National Treasury put forward a series of measures to reduce the country’s budget deficit and to stabilise public debt.
Speaking to SAnews after the budget speech, Public Enterprises Minister Lynne Brown, whose department oversees several key state-owned entities, said Minister Nene took the necessary steps to put the country on sound footing.
“I think the minister is right. All state companies must come within budget and work on their own balance sheet because that’s the right thing to do.
“We’ve got to run the state-owned companies as if they were companies that have to create profits [and] also companies that work properly and so I support the Minister,” said Minister Brown outside the steps of Parliament.
Government has proposed a new framework for funding state-owned companies, which will include closer monitoring of such entities.
Tabling the MTBPS in Parliament, Minister Nene said that state-owned companies and public entities play important roles in realising government’s economic and social mandate.
These entities, he said, need to be financially sound and operationally effective, contributing to development without draining the fiscus.
“Government is proposing a new framework for funding state-owned companies that will distinguish purely commercial activities from the costs of exercising their developmental mandate,” said Minister Nene.
Minister Brown is due to meet with one of the entities, South African Airways (SAA), on Thursday. She said SAA must do what it is “supposed to do” to stay operational.
“They must keep the aircrafts in the air. They must have good governance in their boards and ... they must make profits but at the same time, they are a part of a developing state and must make the money for the state,” said Minister Brown.
The Minister said the airline’s turnaround strategy, which she described as “very good”, will remain in place to change the company’s fortunes.
The Deputy Minister of Small Business Development, Elizabeth Thabethe, also welcomed the MTBPS.
“Under the current economic situation - globally and domestically - our growth rate is low. It is a tough move for the minister but I think he has presented a very good MTBPS. It will be able to take us forward,” she said.
The Democratic Alliance’s Parliamentary leader, Mmusi Maimane, said the budget focused a lot on state interventions.
“… I think there needs to be bolder actions,” he said, adding that more must be done with the available resources.
Freedom Front Plus leader Pieter Mulder said the cuts announced by Minister Nene were relevant in the face of the downwardly revised growth rate of 1.4% for 2014.
“In the end, he said that total savings will be R1.3 billion from the cuts but R15 billion more is needed in revenue. Surely that means tax increases to get that R15 billion and that’s my problem. The spending on infrastructure is good though,” said Mulder. – SAnews.gov.za
