Finance Minister Pravin Gordhan’s 2016 budget speech has been described as “pragmatic”, “interesting”, “praise-worthy” and “disappointing” as political parties represented in Parliament on Wednesday reacted to his plan to lift the country’s struggling economy out of choppy waters.
As expected, the ANC welcomed Gordhan’s pronouncements, with ANC secretary general Gwede Mantashe saying it was firmly aligned to ruling party policy.
He said the minister’s budget speech had adequately responded to the concerns of protesting students, the trade union movement, and had continued to prioritise spending on education, while also looking at how it could improve the financial situation of struggling state-owned companies.
“The budget has addressed the critical issues that should be addressed like the consolidation of the airlines – SAA and SA Express,” he said.
“We are saying we’ll allow some minority stakeholder in the airline. That in itself is pragmatic.”
While the Democratic Alliance also welcomed the announcement on SAA, it said the spending cuts announced were not “deep enough”.
DA MP David Maynier said the cuts should have included slashing President Jacob Zuma’s “bloated cabinet” down to 15 ministries, saving the fiscus, according to him, R4.7-billion.
Maynier welcomed the budget deficit reduction to 3.2% of GDP for this financial year.
“I do concede that it being cut to below 3% of GDP in the outer years is positive from a ratings downgrade point of view.”
Government’s intention to explore merging SAA and South African Express and finding a minority equity partner for a new, bigger airline, also found favour with South Africa’s biggest opposition party.
“We have to welcome the minister’s announcement that there will be consolidation at SAA, and that SAA will now consider bringing in an equity partner which will invite private sector investment and we certainly hope the term strengthening the SAA board is ministerial code for getting rid of Myeni so it certainly was a positive aspect of the minister’s speech,” said Maynier.
Maynier was referring to SAA board chairwoman Dudu Myeni, who came under fire last year after she tried to renegotiate a lease agreement with Airbus, drawing a stern warning from National Treasury that the airline could be penalised financially.
In late December, Gordhan instructed her to revert to the original deal with the European aircraft manufacturer.
EFF leader Julius Malema, in an uncharacteristic move, praised Gordhan and said South Africans should rally around the minister and the budget he tabled because he had done what was needed to avert having “our country relegated to junk status” – a reference to the much-predicted loss of investment rate credit rating.
He also praised the amnesty for the declaration of offshore assets, saying it appeared that the minister had heeded a letter the EFF wrote to him earlier this week, urging a clampdown on aggressive tax avoidance.
“We are very happy because we wrote a letter two days ago and the minister spoke to it with commitment. He has put a timeframe and said it was a serious matter,” Malema said. “The minister came to present the budget at the most difficult time. It is time we put aside political and ideological differences and show a sign of unity… There are still men and women of honour,” he added.
“We think it is necessary to rally behind the minister’s budget.”
When asked why he was prepared to listen to Gordhan, who was appointed by President Jacob Zuma, when he was not prepared to listen to Zuma’s state of the nation address earlier this month, instead making a dramatic exit from the National Assembly, he said: “Pravin Gordhan was not appointed by Jacob Zuma. Zuma wanted Van Rooyen.” This was in reference to the president’s comment earlier this week that he still believed David van Rooyen, who is now local government minister, was the most competent person to head National Treasury.
Malema stressed that it was only because of “interventions” from elsewhere that Zuma had replaced Van Rooyen with Gordhan in December, just four days after he had fired trusted finance minister Nhlanhla Nene and imposed the former backbencher.
IFP MP Sibongile Nkomo said the minister delivered a “well-crafted” speech, and noted that he had made good on the promises of his predecessor, adding she thought it would be well received by the public.
“We need to ensure that the man in the street is given more than hope, that he is a shareholder,” she said.
African Christian Democratic Party MP Steve Swart thought that Gordhan should have spent more time and money addressing the crisis brought on by the drought.
“Consideration should be given to declare those areas national disaster areas. We are talking about food security in the long run,” said Swart. – African News Agency (ANA)