Busa accepts ‘balanced’ budget

2010-02-18 09:10

FINANCE Minister Pravin Gordhan’s maiden budget speech was

“balanced and appropriate”, given the current global economic environment,

Business Unity SA said yesterday.

“We concur that partnership is the most effective way to tackle

economic challenges facing the South African economy,” Busa CEO Jerry Vilakazi

said in a statement.

“We also believe that economic growth is integral to the

achievement of the stated objectives of reducing unemployment, poverty and

inequality levels in South Africa.”

Busa was convinced an enterprise-development centred economy was

the most sustainable way to achieve these objectives.

Vilakazi welcomed the explicit clarification of government policy

on the Reserve Bank’s mandate, inflation targeting and exchange rate


This would strengthen investor confidence in the country’s


Policy certainty, combined with further discussions on

liberalisation of exchange controls, would inevitably reduce the cost of doing


“Busa believes that a stable financial sector is crucial for the

stability of the South African economy, as well as the protection of consumers.

In that regard, we welcome the regulatory initiatives (domestic and

international) highlighted by the minister.”

Vilakazi said all relevant parties should monitor the size of

public borrowing through its expected increase from 23% of GDP in 2008/9 to

about 40% of GDP by 2013.

“It is crucial that expenditure growth is kept at moderate levels,

to avoid unsustainable debt levels which threaten sovereign solvency. In this

regard, the Minister’s commitment to stabilise the size of the public borrowing

programme by 2015 is supported.”

The upward revision of the economic growth forecast to 2,3% of GDP

for 2010/11 was reasonable.

Vilakazi said a number of areas required further elucidation in the

budget, namely energy financing, including the establishment of institutions to

support energy security – specifically the independent systems operator

announced by President Jacob Zuma in his state-of-the-nation speech.

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