Cape Town - Finance Minister Nhlanhla Nene has not strayed much from the more austere fiscal path adopted last year and his mini budget tabled in parliament on Wednesday did not contain any big surprises.
With the economy having slowed down, Nene is aware of the limited resources at his disposal. He seems to be honest about the restraints and negative realities, but reluctant to raise taxes. He is prepared to use austerity measures, reallocations, the sale of state assets and contingency reserves to prevent the budget deficit and borrowing from creeping up.
He also recognised the need to get a confident private sector behind efforts to grow the economy. Nene said at a press conference before his speech that there is no way “this economy can grow if the private sector is not on board”. Let’s hope that government as a whole shares his thinking and approach.
The theme of the mini budget is “Sustaining progress in a low-growth world”. A proposed long-term fiscal guideline will align spending and gross domestic product growth. Nene stressed the importance of good fiscal planning and sustainable allocation of public funds, much like in previous budgets. Over the last decade, public spending has doubled in real terms.