The business of finance

2010-02-20 09:36


much sleep did you get this week?

I have

been able to sleep for five hours a night. I tend to work faster and harder

during the day. We have spent more time communicating with the public, which is

important. The economy can’t be just a concern of the economists. The economy is

about every household. More people need to understand where the taxes go and how

the government makes choices.


there room for improvement in tax collection?


collection depends on the size of the population and how well the tax is

collected and, most importantly, the ­economy.


this financial year we are projecting to lose R69 billion (in tax revenue). We

hope there will be stability between now and the end of the financial year and

that next year will be what we think it will be.


economists are worried about the W-shaped recession. We hope the recovery will

be smooth and faster than it is. If that is the case we will be fine.


real a threat are tax increases next year and can the tax net be



would ideally like to broaden the tax base instead of increasing taxes. We would

like South Africans to cooperate and pay their fair share. We have too many

people we know are not properly declaring their income. Some people get tenders

from the government but do not pay their taxes.


things are happening in the country and internationally. The walls of tax havens

are falling and the space to manoeuvre internationally is becoming



other is voluntary disclosure. We are saying to South Africans: “Come clean and

be honest with us. You will still pay your taxes but the penalties will be


But if

the economy does not perform as we expect it to then we will have to re-examine

our tax rates.


lesson can be learnt about state debt if you look at the experience in Greece,

and are you nervous about the rate increase in government debt?


sleep very peacefully. We’ve had a good record in recent years, where we paid

off debt and we didn’t borrow too much.That is partly because we were collecting

more taxes.


were able to manage our debt portfolio to 23% of GDP. When you’re at that point

you realise that we still have a lot of space to borrow.


40% forecast in state debt is modest compared to Greece, which is more than 100%

and the US and UK, where it stands at between 70% and 100%.

But we

have to be sure that we keep to the fiscal path that we have mapped out, with a

budget deficit of 7.3% this year, 6.2% next year and eventually 4.1%.


will be another crisis. We have learnt from this crisis that we need to reduce

our deficit as quickly as possible.


picture is emerging about corruption that you are able to see as a result of the

work you are doing as part of the Inter-Ministerial Task Team?


is happening on a broad scale. But let us look at social grants, which are meant

for poor people, the aged and the disabled.


are thousands of people who are working, including civil servants, who are

accessing child support grants. That is wrong.


is lots of corruption in the production of identity documents and there are

people who are not paying tax.


there is the procurement side. We have cases totalling R2 billion and have

identified 1 200 civil servants who are ­engaged in tender and tax fraud.

We are

now working on matching databases. We will be able to see who gets tenders, who

is on the tax and other government systems.

We are

reviewing the system as a whole to see if the state can’t procure in a different



on your experiences, do you find that civil servants are buying into the

anti-corruption message and how well are you communicating that message?


things take time and we need more public pressure.


need to be intolerant of people who get tenders and do not pay their taxes. The

process has begun. More people are talking about it.


time, people who are engaged in these practices will be regarded as misfits in



you think the kind of spending the government is pursuing is encouraging skills



need to give Higher Education Minister Blade Nzimande time to redesign the

system. In the years that follow this will place us in a better position in

terms of skills. But we also need an initiative from the individual.


need to look for opportunities to improve their skills.


the private sector needs to invest in upgrading the skills of its employees.

Without this the economy will not be able to compete globally.


recession has trained the spotlight on banking. Local institutions have come out

well. Is there room to improve regulation in this sector?


have indicated that we will be meeting the chief executives of the banks



things we want to talk to them about include the Competition Commission report

in bank charges, how to improve regulation, how to respond to international

standards that are emerging, and tax compliance.


we will need to implement a lot of the international standards that ­apply to

South Africa.


is it important that the Financial Services Charter is salvaged?


charter took dialogue with the private sector a significant way forward. It

reoriented banks to making an investment towards the social development of South



spirit of the charter was right. We need to get consensus and that will benefit

the country.


you personally respond to comments left on your ­Facebook page?


of them are my own. In recent times I have been assisted by my team but I have

told them exactly what to say. Soon I’ll be getting back to answering them


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