Parties seek leadership from Gordhan

2012-10-23 14:01

Finance Minister Pravin Gordhan should use his medium-term budget policy statement to Parliament to place a firm hand on the tiller, the DA has said.

DA spokesperson Tim Harris said in his statement on Thursday, the minister should provide the leadership to cut through the government’s mixed messages on the economy.

“He needs to send a strong signal that debt will not be allowed to rise to unsustainable levels, and that wasteful expenditure will be cut across government,” said Harris.

“Most importantly, he must show investors that he is firmly in charge of economic policy, and that the government is able to implement a clear plan to ensure that South Africa is a place where they can do business.”

In his policy statement, Gordhan should firmly dispel fears that government might bow to pressure from its tripartite partners to implement unsustainable, populist policy.

Instead they should commit to containing national debt to levels at around 40% of GDP over the medium-term, Harris said.

Among other things, he should announce a programme of wholesale policy reform and implementation of the proposals contained in the National Development Plan, starting with the departmental budgets announced in February 2013.

Further, public sector pay should be aligned with productivity to incentivise efficiency in government spending.

Policy steps should be implemented to address the systematic drivers of strike action, which diminished productivity and tax revenues, and undermined political and economic stability.

“The challenge facing minister Gordhan is to reassure both local and foreign investors of South Africa’s political and economic stability,” Harris said.

“He needs to do this while convincing credit agencies and economists alike of the soundness of his plans to consolidate the fiscus.”

Congress of the People spokesperson Nick Koornhof said there were “huge question marks” about leadership in South Africa.

Against this background, Gordhan had to rise to the occasion to defend and uphold strong fiscal discipline when he delivered the statement.

“This is a vital moment for SA – our social contract is under siege, we cannot even consider to have a weak finance minister.

“Thursday is Pravin Gordhan’s moment to try to restore some lost ground in terms of the perception credit rating agencies and investors have about us,” he said.

The expediency allowed during President Jacob Zuma’s tenure had to end.

Bad administration and leadership were pushing the eye of the storm towards South Africa’s shores, he said.

“We get the feeling that ministers and their departments were not taking the world economic crisis seriously.”

Gordhan had to restore confidence on Thursday and should not let go on strong fiscal policy, despite a lower growth rate and a growing deficit, Koornhof said.

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