Budget debate goes ahead without Gordhan

Finance Minister Pravin Gordhan at the post-Cabinet briefing. (Photo: GCIS)
Finance Minister Pravin Gordhan at the post-Cabinet briefing. (Photo: GCIS)

Cape Town - A possible Moody's ratings downgrade weighed heavily on MPs in the National Assembly on Wednesday while Finance Minister Pravin Gordhan rallied investors abroad.

Gordhan's pew was empty during the debate on the Budget he delivered on February 24, prompting the DA to complain about his absence. But ANC MPs came to his defence, saying he hadn't been absent before, and was not likely to be again.

The DA had complained in a statement earlier on Wednesday that Gordhan should have put the debate first, and then travelled to the UK and US to drum up investor confidence.

"He had to move swiftly to reassure the ratings agency and investors," said Yunus Carrim, who heads Parliament's portfolio committee on finance.

He lambasted DA MP David Maynier for issuing the statement, saying the party wanted the economy to collapse just so that it could get votes.

"Every evening [Maynier] spends hours wracking his little brain to work out what angle he should take to attack the ANC," said Carrim.

"I am sure they are gloating about Moody's decision. But the ship won't sink."

Following Carrim at the podium, Maynier said that no sooner had Gordhan tabled his "How to beat a ratings downgrade Budget," than the Hawks were demanding he answer 27 questions relating to a "rogue" unit at the SA Revenue Services (Sars).

"The outbreak of the 'Sars wars' could not have come at a worse time as we hurtle towards junk status in South Africa," said Maynier.

"Ratings agencies are circling like sharks ready to downgrade us to junk status at any moment."

This was equivalent to being put on "economic death row".

Moody's cited among its concerns the effect of the drought on food availability and inflation, a declining growth rate, rising interest rates and a depreciating rand.

It could confirm the current rating if the review finds that policymakers would maintain spending restraint, succeed in the delivery of planned structural reforms, achieve the fiscal consolidation envisioned in the 2016/17 Budget Review, and thereby reverse the deterioration in key credit metrics witnessed in the past few years.

Maynier said that while Gordhan was abroad telling everybody government, ministers and labour had been working together, they were actually at odds with each other.

For example, while Gordhan was trying to boost savings, union federation the Congress of SA Trade Unions was threatening to strike over retirement reforms and the government had caved in to them.

"To avoid a ratings downgrade, government will have to take hard decisions to avoid junk status," he said.

Congress of the People MP Willie Madisha said if Moody's did decide to downgrade, it would be difficult for government to service its R1.2 trillion debt.

ANC MP Makhosi Busisiwe Khoza, defended Gordhan saying, "There are those who would want to focus on blame, instead of focusing on the crisis on hand".

She said there was so much financial illiteracy, "it is unbelievable".

Rather than trying to secure silly political points, people should focus on stability, she added, ending with a call for votes for the ANC.

The session was closed by Deputy Finance Minister Mcebisi Jonas repeating Gordhan's statement that South Africa "cannot spend money it does not have".

He said the government was being tough, but not on the poor and vulnerable. "We are being tough on government itself," he said. 

But it was not doing this to keep some constituency happy - it was in the interests of everybody in the country, he said.

"We all feel the pinch of economic downturn," he said, while many MPs on either side of the House chatted among themselves.

The Budget was adopted with 218 votes in favour, 63 against and no abstentions.

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