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#MiniBudget2017 - As it happened

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26 Oct 2017

BUDGET REACTION: VIDEO RECAP 

Politicians and other stakeholders reacted with differing opinions following Finance Minister Malusi Gibaba’s maiden mini budget speech on Wednesday.

26 Oct 2017

MINI BUDGET REACTION: Gordhan warning rings true in mini budget - tax expert

In his February 2017 budget speech former finance minister Pravin Gordhan cautioned that both SA's tax administration and taxpayer morality posed a risk to public finances, said Ian Matthews, head of business development at Bravura, in his comment on the mini budget.

Matthews said these words of caution are now ringing true, as rising public concerns about corruption, wastage of public funds and inefficiencies in service delivery are clearly affecting the willingness of South Africans to comply and pay their taxes.

Gordhan, who was removed as Finance Minister in late May, had highlighted the necessity of having a strong social contract between government and taxpayers, given that the effectiveness of a tax system relies largely on the willingness of citizens to contribute and to be compliant.

In his maiden mini budget on Wednesday afternoon, Finance Minister Malusi Gigaba did not give a clear enough indication on how it intends to address its revenue shortfall, leaving experts to speculate that the majority of revenue will be financed by taking on additional debt, according to Mike Teuchert, national head of taxation at Mazars.

READ: Gordhan warning rings true in mini budget - tax expert

26 Oct 2017

MINI BUDGET REACTION: Fitch has little faith in SA post mini budget

Fitch Ratings has revealed its disappointment with Finance Minister Malusi Gigaba's maiden mini budget, which has caused the rand to remain increasingly shaky.

Fitch, which downgraded both South Africa's local and foreign ratings to junk status following March's Cabinet reshuffle, said the dire economic picture painted "suggests that the change in direction of policy making away from a focus on fiscal consolidation that we anticipated as a consequence of March's Cabinet reshuffle is under way and occurring faster than we had expected".

It said Gigaba's mini budget forecast a “sharp fall in fiscal revenue, but has no measures to contain the impact on deficits and debt".

<p><strong>MINI BUDGET REACTION: Fitch has little faith in SA post mini budget</strong></p><p>Fitch Ratings has revealed its disappointment with Finance Minister Malusi Gigaba's maiden mini budget, which has caused the rand to remain increasingly shaky.</p><p>Fitch, which downgraded both South Africa's local and foreign ratings to junk status following March's Cabinet reshuffle, said the dire economic picture painted "suggests that the change in direction of policy making away from a focus on fiscal consolidation that we anticipated as a consequence of March's Cabinet reshuffle is under way and occurring faster than we had expected".</p><p>It said Gigaba's mini budget forecast a “sharp fall in fiscal revenue, but has no measures to contain the impact on deficits and debt".</p><p></p>
READ: Fitch has little faith in SA post mini budget

25 Oct 2017

Visit Fin24's mini budget hub for all budget-related news and analysis. 
VISIT: Fin24 mini budget site

25 Oct 2017

GDP growth: SA slowly grinding to a halt

South Africa’s economic growth outlook remained dismal, as Finance Minister Malusi Gigaba’s budget on Wednesday gave few answers on how the country could ignite the growth needed. 

“It is not in the public interest, nor is it in the interest of government to sugar-coat the state of our economy and the challenges we are facing,” Gigaba warned in his afternoon speech. 

South Africa’s economic figures paint a picture of an economy slowly grinding to a halt. The country’s projected gross domestic product growth for 2017 has been adjusted downwards to 0.7%, Treasury stated in its Medium-term Budget Policy Statement.

Gigaba's growth outlook is in line with local economists, the SA reserve Bank and the World Bank. 

The projected growth was forecast at 1.3% earlier this year when former finance minister Pravin Gordhan delivered the budget at the end of February. 

Treasury was still optimistic that GDP growth could pick up speed again. 

Gigaba forecast growth in SA to reach 1.1% in 2018, and 1.5% in 2019.

He expected growth to increase slowly reaching, 1.9% in 2020. “This trend assumes that the status quo prevails,” he said. “Therefore, we have the power to change our course and the political, social and economic agency to chart a new path.”

READ: SA GDP growth slowly grinding to a halt

25 Oct 2017

Gigaba's budget a 'red flag' for ratings agencies - analyst

Finance Minister Malusi Gigaba did not grasp the opportunity to provide inspired fiscal direction when he delivered his first mini budget on Wednesday, said Kemp Munnik, head of structured solutions at banking and consultancy firm Bravura. 

"Gigaba's first budgetary statement was keenly watched by local and international investors given the current high levels of uncertainty on an economic and political level in South Africa," said Munnik.

The mini budget is significant because it provides insight into planned government expenditure and indicates expected tax increases that South African taxpayers have to face. It also informs decisions of the credit rating agencies about South Africa's fiscal stability.

"Wednesday's statement provided a bleak picture of the economy, but provided very little in the form of clear proposals on the way forward," he said. 

READ: Gigaba's budget a 'red flag' for ratings agencies - analyst

25 Oct 2017

Weaker rand helps hedge stocks 

While investors and economists warily watched the rand's fall in the wake of the finance minister's speech, the weakening local currency did bring positive benefits to rand hedge stocks. 

The Johannesburg Stock Exchange reversed earlier losses on Wednesday to close the day firmer after the delivery of the medium-term budget speech. 

This reversal was driven mainly by the weaker rand - which fell to a low of R14.11 against the dollar - which resulted in the rand hedge stocks firming.

<p><strong>Weaker rand helps hedge stocks&nbsp;</strong></p><p>While investors and economists warily watched the rand's fall in the wake of the finance minister's speech, the weakening local currency did bring positive benefits to rand hedge stocks.&nbsp;</p><p>The Johannesburg Stock Exchange reversed earlier losses on Wednesday to close the day firmer after the delivery of the medium-term budget speech.&nbsp;</p><p>This reversal was driven mainly by the weaker rand - which fell to a low of R14.11 against the dollar - which resulted in the rand hedge stocks firming.</p>
READ: Rand hedges propel JSE higher

25 Oct 2017

Gigaba still to announce plans for SAA equity partner

The plan to consolidate South African Airways (SAA) and SA Express and to find an equity partner is under way, Finance Minister Malusi Gigaba said in his maiden mini budget speech.

"After we meet the board of SAA, we will pronounce on our plans to consolidate aviation assets and bring in a strategic equity partner," he said. 

A new board was appointed last week, which included at least one person with aviation expertise.

"We believe a strategic equity partner can play an important role in SAA’s turnaround, as well as unlocking value for the fiscus, which has invested significantly in the airline over the years," Gigaba said.

<p><strong>Gigaba still to announce plans for SAA equity partner</strong></p><p>The plan to consolidate South African Airways (SAA) and SA Express and to find an equity partner is under way, Finance Minister Malusi Gigaba said in his maiden mini budget speech.</p><p>"After we meet the board of SAA, we will pronounce on our plans to consolidate aviation assets and bring in a strategic equity partner," he said.&nbsp;</p><p>A new board was appointed last week, which included at least one person with aviation expertise.</p><p>"We believe a strategic equity partner can play an important role in SAA’s turnaround, as well as unlocking value for the fiscus, which has invested significantly in the airline over the years," Gigaba said.</p><p></p>
READ: Plan to find an equity partner for SAA is under way - Gigaba

25 Oct 2017

No stopping rand/dollar runaway train at the moment 

The rand extended its losses on Wednesday as markets digested the finance minister's first medium-term budget, said TreasuryOne in a snap note.  

It said there is no stopping the "runaway train" the USDZAR is on currently.

The local unit breached R14.10/$ following Gigaba's speech - its weakest level this year.

"The ZAR is by far the worst performing currency of the day. The R186 bond yields [were] up by 25bps for the day, trading at 9.10% currently, also at a 2017 high. 

"We do think that the rally is a bit overdone and that we can perhaps see a retracement," said TreasuryOne currency dealer Wichard Cilliers said in a snap note.

By 18:19 the local unit was trading at R14.10, some 2.5% weaker than its overnight close . It had earlier touched a low of R14.11.

<p><strong>No stopping rand/dollar runaway train at the moment&nbsp;</strong></p><p>The rand extended its losses on Wednesday as markets digested the finance minister's first medium-term budget, said TreasuryOne in a snap note.&nbsp;&nbsp;</p><p>It said there is no stopping the "runaway train" the USDZAR is on currently. </p><p>The local unit breached R14.10/$ following Gigaba's speech - its weakest level this year.</p><p>"The ZAR is by far the worst performing currency of the day. The R186 bond yields [were] up by 25bps for the day, trading at 9.10% currently, also at a 2017 high.&nbsp;</p><p>"We do think that the rally is a bit overdone and that we can perhaps see a retracement," said TreasuryOne currency dealer Wichard Cilliers said in a snap note.</p><p>By 18:19 the local unit was trading at R14.10, some 2.5% weaker than its overnight close . It had earlier touched a low of R14.11.</p>

25 Oct 2017

WATCH: Fin24 Deputy Editor Matthew le Cordeur speaks to Finance Minister Malusi Gigaba following his maiden mini budget speech about the rand's drop. 

25 Oct 2017

Analyst doubtful on Gigaba's SAA plans

Tertius Troost, a tax consultant at Mazars, said in the wake of Gigaba's mini budget that National Treasury’s plans to rescue national carrier South African Airways could be problematic.

“The Minister makes mention of selling around R4.95 billion Telkom shares to fund SAA, which we do not believe to be prudent. Treasury would in effect be getting rid of a good asset to finance a bad one,” he said. 

25 Oct 2017

More Twitter reaction to the finance minister's maiden mini budget. 

25 Oct 2017

Gigaba decides not to scrap medical tax deductions - yet

While the finance minister hinted at higher taxes to come in February,  he did not give details about ditching medical tax deductions in his mini budget.

Some analysts had expected Gigaba to drop theSE credits in an effort to boost the government's coffers, with the state is facing a R50bn tax revenue shortfall. 

But he has chosen not do this, at least not yet. 

READ: Gigaba decides not to scrap medical tax deductions - yet

25 Oct 2017

ANC Parliamentary caucus lauds mini budget 

The ANC's Parliamentary caucus has said it "welcomes" Finance Minister Malusi Gigaba's first mini budget. 

In a statement on Wednesday afternoon, the caucus noted that the budget called for "engineering of a new growth and transformation model, one that is anchored on a common vision for the economy and its society".

This model, the ANC said "embraces sharing of economic resources and producing a South Africa that truly should economically belong to all of us that live in it".

"It addresses structural change of patterns of ownership, control, management and production. The financing of the policy choices reflected in the [mini budget] is therefore underpinned by the ANC government’s commitment to social and economic transformation," it said. 

The caucus said that the wealth disparities spoken of by Gigaba were "completely unacceptable".

The finance minister had said that 95% of the country's wealth was in the hands of just 10% of the population. 

"This is completely unacceptable and reinforces the need for radical economic transformation that benefits all our people, but primarily the poor and disadvantaged," it said.

The caucus also praised what Gigaba's promise to ensure more effective oversight of state-owned enterprises. 

"On South African Airways in particular, we believe a strategic equity partner can play an important role in SAA’s turnaround, as well as unlocking value for the fiscus which has invested significantly in the airline over the years," said the caucus. 

25 Oct 2017

Labour expert Terry Bell speaks to trade unionists to gauge their reaction to Gigaba's mini budget. 

The labour movement was certainly not surprised by what many consider was a "non-Budget" delivered today by finance minister Malusi Gigaba. 

A widespread attitude was summed up by SA Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi when he noted:  “It was what we expected, but it was beyond shocking”. 

Vavi added: “It was a brazen and shameless display".

Before the speech, even government-aligned Cosatu expressed "trepidation" at what was to come, while pointing out that nearly 14 million South Africans now live below the food poverty line of R17.38 per person per day.

There was faint hope expressed that any good would come from “an administration whose legacy is of systematic looting and corruption".

Dennis George, general secretary of the Federation of Unions (Fedusa) also expressed faint hope that some major turn-around might be announced. 

And a pre-Budget Saftu comment was that if Gibaga was honest he would admit “that he could do nothing while the country is in the stranglehold of a corrupt, criminal band of looters”. 

As a result, there was no surprise felt among the unions with some muttering about the need for “mass mobilisation”. 

Given this situation and the fact that public sector wage talks are scheduled to begin with government budgeting for a 7% pay rise and unions demanding double digits, the scene seems set for considerable turmoil.

25 Oct 2017

SAA - Gigaba has helped stabilise the airline 

South African Airways has said it welcomes the announcement by the minister of finance of a capital injection for the airline.

"The injection will go a long way to stabilise the airline financially and will help restore the confidence of all stakeholders in the operational sustainability of the company," SAA said in a statement following Gigaba's maiden mini budget. 

SAA had asked Treasury (its shareholder) for recapitalisation of R13.1bn over three years. 

"The announcement today means that a total amount of R10bn has been allocated to SAA in the current financial year. For the period ending 31 September, the airline received R5.2bn," the national carrier said. 

Of this, R2.2bn was used to settle a maturing loan with Standard Chartered in July 2017 and another R700m was paid to Citibank in September this year as part of an agreed payment plan and R1.2bn was used towards working capital requirements.  

The funds remaining out of the R5.2bn are ring-fenced to enable SAA to meet its payment plan with Citibank and to cover working capital requirements or partially settle the domestic lenders, it said.

Out of the remaining R4.8bn, SAA said that some 60% will be used to partially pay local lenders, and the remainder of the funds will be used as working capital.

In his budget address, Gigaba had said that SAA "sells South Africa’s economy, tourism and culture to every one of its passengers".

"Global airlines do not, and will not, perform this priceless marketing and branding role for us," he said.

The finance minister was under pressure to explain why the government keeps giving SAA money. 

"So let us not ignore the contribution SAA is making to our nation’s development, even as we insist on dramatic improvements in its governance, strategy and operations," he said. 

25 Oct 2017

COPE on mini budget: 'the country has no money'

While analysts and politicians will spend the next few days scrutinizing the mini budget in more depth, initial reaction has started to come in. 

For the Congress of the People (COPE), Gigaba's mini budget showed that "due to financial mismanagement, the country has no money".

COPE foresaw dire economic straits in the future. 

It said the rand has proved "time and again that policy and political uncertainty are leading South Africa down junk status when rating agencies (have to) make their December findings".

It called on all South Africans to reject the country's nuclear programme.

25 Oct 2017

Gigaba: SA can’t afford nuclear - yet

South Africa cannot afford nuclear at present, Finance Minister Malusi Gigaba told a media briefing ahead of his mini budget speech on Wednesday, pouring cold water on the notion that the nuclear programme could see a revival before the end of the year. 

He said there is no room for a nuclear programme in South Africa's current constrained budget. 

Gigaba’s mini budget revealed little of South Africa’s anticipated energy path for the future, including whether funds for the country’s controversial new nuclear programme would be available in future.

At the briefing Gigaba said nuclear is definitely not off the table yet.

However, no decision on nuclear could be made before SA’s Integrated Resource Plan (IRP) has been updated, which is only expected to happen next year. 

In his address Gigaba said SA’s updated IRP should enable an energy policy which provides electricity at the lowest possible cost to households and industry. 

<p><strong>Gigaba: SA can’t afford nuclear - yet</strong></p><p>South Africa cannot afford nuclear at present, Finance Minister Malusi Gigaba told a media briefing ahead of his mini budget speech on Wednesday, pouring cold water on the notion that the nuclear programme could see a revival before the end of the year.&nbsp;</p><p>He said there is no room for a nuclear programme in South Africa's current constrained budget.&nbsp;</p><p>Gigaba’s mini budget revealed little of South Africa’s anticipated energy path for the future, including whether funds for the country’s controversial new nuclear programme would be available in future.</p><p>At the briefing Gigaba said nuclear is definitely not off the table yet. </p><p>However, no decision on nuclear could be made before SA’s Integrated Resource Plan (IRP) has been updated, which is only expected to happen next year.&nbsp;</p><p>In his address Gigaba said SA’s updated IRP should enable an energy policy which provides electricity at the lowest possible cost to households and industry.&nbsp;</p>
READ: Gigaba: SA can’t afford nuclear - yet

25 Oct 2017

Hot takes 

Read some of the top reaction tweets to the finance minister's maiden mini budget speech.

25 Oct 2017

WATCH: Fin24 presenter Moeshfieka Botha gives a rundown of the key elements in the finance minister's maiden mini budget.

25 Oct 2017

The budget in a nutshell 

Finance Minister Malusi Gigaba's maiden budget performance in Parliament on Wednesday did not leave any room for celebration, and government's finances and prospects over the next three years do not present a rosy picture.

Low economic growth (down to an expected 0.7% this year) has resulted in skyrocketing risks, with the Medium-term Budget Policy Statement talking about “SA confronting a low-growth trap".

The projected revenue shortfall was higher than expected at R50.8bn (for the 2017/18 budget), resulting in an increasing budget deficit and a substantial debt risk hike.

At about 15%, debt repayment costs are already the biggest budget item.The biggest disappointment of Gigaba’s speech was the lack of real new initiatives or measures to stimulate growth or cut government expenses.

The plans sound very familiar, and phrases like "an interministerial committee will look at that”, “announcements will be made later (in February)" or “some programmes will need to be eliminated, or funding reduced" are downright unacceptable.

<p><strong>The budget in a nutshell&nbsp;</strong></p><p>Finance Minister Malusi Gigaba's maiden budget performance in Parliament on Wednesday did not leave any room for celebration, and government's finances and prospects over the next three years do not present a rosy picture.</p><p>Low economic growth (down to an expected 0.7% this year) has resulted in skyrocketing risks, with the Medium-term Budget Policy Statement talking about “SA confronting a low-growth trap".</p><p>The projected revenue shortfall was higher than expected at R50.8bn (for the 2017/18 budget), resulting in an increasing budget deficit and a substantial debt risk hike. </p><p>At about 15%, debt repayment costs are already the biggest budget item.The biggest disappointment of Gigaba’s speech was the lack of real new initiatives or measures to stimulate growth or cut government expenses. </p><p>The plans sound very familiar, and phrases like "an interministerial committee will look at that”, “announcements will be made later (in February)" or “some programmes will need to be eliminated, or funding reduced" are downright unacceptable.</p><p></p>
READ: Budget in a nutshell

25 Oct 2017

READ: Gigaba's full speech

25 Oct 2017

Gigaba: Transnet, Eskom, SAA critical for transformation

Government needs to leverage off state-owned companies (SOC's) strategically to develop the economy, Gigaba said in his mini budget. 

He explained that historically, state companies have helped to advance black professionals but in recent years have become burdensome and require government bailouts due to governance failures, corruption and operational inefficiencies.

“State-owned companies are developing a poor reputation with the public at large, and have become a major fiscal risk to the country due to government guarantees of their debt,” he said. 

Previously these SOCs have played a “leading role” in developing “world class infrastructure” needed for the SA economy.

They have also helped provide services to historically neglected communities and invested in skills development, among other things, he pointed out. 

“SOCs like Eskom, Transnet and SAA are multi-billion rand companies by revenue, with enormous value chains. We have increasingly begun to use these strategically, incorporating localisation and preferential procurement into their operation philosophy and investment plans,” said Gigaba.

READ: Gigaba: Transnet, Eskom, SAA critical for transformation

25 Oct 2017

A word cloud of the most common words used by the finance minister shows that "growth" comes out on top. 
A word cloud of the most common words used by the finance minister shows that "growth" comes out on top.&nbsp;

25 Oct 2017

Gigaba thanks Zuma 

Gigaba has finished his speech, and starts by thanking President Jacob Zuma. 

"President Zuma, thank you for your guidance and leadership," he said.

"Deputy President Ramaphosa, thank you for your encouragement.I would also like to thank my Cabinet colleagues, members of the Ministers’ Committee on theBudget and the Presidential Fiscal Committee for their cooperation and support." 

25 Oct 2017

Unprofitable SOEs have become a ‘substantial’ risk on fiscus

South Africa’s unprofitable state-owned entities have become a fiscal risk for government, according to the 2017 mini budget. 

“Continued financial deterioration of major state-owned companies is a clear and substantial danger to the public finances,” the mini budget states.

“Additional risks to the framework include more financial demands from state-owned companies,” it said.

Treasury said that global developments leading to broad aversion towards developing-country debt, or a sharp deterioration in the balance sheet of a state-owned company, could result in risk premium increases to varying degrees.

“A moderate increase in the risk premium could see growth slow to 0.6% in 2018 and 0.9% in 2019. A large increase in the risk premium could see growth contracting by 1.2% in 2018 and 0.8% in 2019.” 

“Several state-owned companies persistently demonstrate operational inefficiencies, poor procurement practices, weak corporate governance and failures to abide by fiduciary obligations. The risk here is substantial.”  

Between 2011/12 and 2016/17, the combined profitability of the state-owned companies, measured by return on equity, declined from 7.5% to an estimated 0.2%, it said.

“A growing portion of their operating expenditure is funded through debt. 

<p><strong>Unprofitable SOEs have become a ‘substantial’ risk on fiscus</strong></p><p>South Africa’s unprofitable state-owned entities have become a fiscal risk for government, according to the 2017 mini budget.&nbsp;</p><p>“Continued financial deterioration of major state-owned companies is a clear and substantial danger to the public finances,” the mini budget states.</p><p>“Additional risks to the framework include more financial demands from state-owned companies,” it said.</p><p>Treasury said that global developments leading to broad aversion towards developing-country debt, or a sharp deterioration in the balance sheet of a state-owned company, could result in risk premium increases to varying degrees.</p><p>“A moderate increase in the risk premium could see growth slow to 0.6% in 2018 and 0.9% in 2019. A large increase in the risk premium could see growth contracting by 1.2% in 2018 and 0.8% in 2019.”&nbsp;</p><p>“Several state-owned companies persistently demonstrate operational inefficiencies, poor procurement practices, weak corporate governance and failures to abide by fiduciary obligations. The risk here is substantial.”&nbsp;&nbsp;</p><p>Between 2011/12 and 2016/17, the combined profitability of the state-owned companies, measured by return on equity, declined from 7.5% to an estimated 0.2%, it said. </p><p>“A growing portion of their operating expenditure is funded through debt.&nbsp;<strong></strong></p>
READ: Unprofitable SOEs have become a ‘substantial’ risk on fiscus

25 Oct 2017

Rand may be starting to stabilise at 2017 high

The rand is starting to stabilise at around R13.94 to the US dollar, the previous high of 2017.

Other emerging market currencies are in fact trading stronger in the afternoon session, as the dollar comes under a bit of pressure. 

TreasuryOne thinks that, for now, the R14.00/$ level will hold.

25 Oct 2017

Budget reaction 

Ruaan Van Eeden, managing director of tax and exchange control at Geneva Management Group, comments on the mini budget:

"In the coming days, talk of the looming fiscal cliff – where government debt spirals out of control – will again take centre stage," he said, as Gigaba's mini budget speech was still ongoing. 

"Finance Minister Malusi Gigaba painted a gloomy picture in his mini budget. South Africa is caught in a low-growth trap.

"Instead of a slow recovery, with 2017 being the turning point, SA slipped into a technical recession in the second quarter of the year and was subjected to several credit ratings downgrades.

"The hard truth is that the growth recovery Treasury had hoped for has not materialised – largely because the policy uncertainty that scares off investors has continued," he said 

25 Oct 2017

Govt could dispose Telkom shares to avoid expenditure breach

Government may dispose of a portion of its “well-performing” shares in fixed and mobile operator Telkom in efforts to avoid a R3.9bn expenditure ceiling breach.

Government’s share in Telkom is estimated to be worth between R14bn and R20bn. 

Gigaba said that the expenditure ceiling could be breached by R3.9bn in the current year, as a result of government’s recapitalisation of South African Airways and the South African Post Office.

“We aim to avoid a breach of the expenditure ceiling this year through the disposal of assets,” Gigaba said during his mini budget speech.

Gigaba added that the Telkom shares would be sold with an option to buy back at a later stage.

READ: Govt could dispose of Telkom shares to avoid expenditure breach

25 Oct 2017

Some 'slippage' in tax compliance - Gigaba 

The finance minister said that, while most SA taxpayers were "responsible", government was noting a "slippage in compliance". 

"SARS has enforcement powers, which are in the main punitive and this will be applied to taxpayers, who wilfully and cynically avoid paying their taxes.

"However, SARS also remains sensitive to taxpayers, who are facing challenges.SARS is also aware of the major problem of illicit financial flows." 

25 Oct 2017

EFF - We don't recognise Gigaba as a legitimate minister 

The EFF left the house before finance minister Malusi Gigaba could start his mini budget speech in Parliament, after holding up proceedings for about 15 minutes. 

Afterwards the party said it didn't recognise Gigaba as a legitimate minister. 

25 Oct 2017

Free higher education for some students will lead to R61bn funding shortfall

If government were to finance the full cost of study for 40% of undergraduates in South Africa it would create a funding shortfall of over R61bn over the next three years, National Treasury said in its medium term budget policy statement (MTBPS) of 2017.

In addition, covering the full cost of study for all students of Technical and Vocational Education and Training (TVET) colleges would amount to R23.5bn over the next three years.

Finance Minister Malusi Gigaba said in his mini budget speech on Wednesday that the student movement in South Africa has “correctly” put the issue of higher education at the centre of South Africa’s transformation agenda.“

The budget already makes an already enormous contribution (towards higher education). The sector’s budget is the fastest growing element of expenditure over the medium term, rising from R77bn this year to R97bn in 2020/21.”

READ: Free higher education for some students will lead to R61bn funding shortfall

25 Oct 2017

No more Mr Nice Guy? 

Finance Minister has drawn a line in the sand regarding government’s expectations of the executives and board members that are running the country’s state-owned companies (SOC) into the ground.

It was revealed in the 2017 mini budget that between 2011/12 and 2016/17, the combined profitability of the SOCs declined from 7.5% to an estimated 0.2%.

“Recent years have seen several worrying developments with regard to SOCs, with worrying trends of governance failures, corruption, operational inefficiency and the need for government bailout,” Gigaba said in his maiden mini budget speech on Wednesday.

“In this way, SOCs are developing a poor reputation with the public at large, and have become a major fiscal risk to the country due to government guarantees of their debt.”

<p><strong>No more Mr Nice Guy?&nbsp;</strong></p><p>Finance Minister has drawn a line in the sand regarding government’s expectations of the executives and board members that are running the country’s state-owned companies (SOC) into the ground.</p><p>It was revealed in the 2017 mini budget that between 2011/12 and 2016/17, the combined profitability of the SOCs declined from 7.5% to an estimated 0.2%.</p><p>“Recent years have seen several worrying developments with regard to SOCs, with worrying trends of governance failures, corruption, operational inefficiency and the need for government bailout,” Gigaba said in his maiden mini budget speech on Wednesday.</p><p>“In this way, SOCs are developing a poor reputation with the public at large, and have become a major fiscal risk to the country due to government guarantees of their debt.”</p>
READ: No more Mr Nice Guy: Gigaba gets tough on state-owned entities

25 Oct 2017

Craig Pheiffer, chief investment strategist at Absa Stockbrokers & Portfolio Management, noted that two of the main takeaways of the mini budget so far were:

*Growth forecasts revised lower than previously expected: 2017 from 1.3% to 0.7% and 1.9% in 2020. The low growth environment impacts the ability to create jobs.

*Inflation forecasts reduced in line with market expectations: 5.4% in 2017, 5.2% in 2018. Lower interest rates are still unlikely with currency risks. 

25 Oct 2017

Gigaba - private sector must invest, and government act as enabler 

"We desperately need government to effectively play its role as an enabler for and an active participant in growth and transformation," said Gigaba. 

"We desperately need business that invests, thereby creating growth and employment."

25 Oct 2017

Gigaba slams 'economic exclusion' 

The minister said that "economic exclusion of a vast section of the population" was undermining a realisation of a more equal society. 

Among the examples he gave, were

* Low direct black ownership and management of the economy.

* Employment equity remaining a challenge, with progress for black people and women participating at top and senior management levels have apparent stalled.

*A high degree of market concentration, with low competition and high barriers to entry.In several sectors, a handful of companies dominate, controlling more than 80-90% of the market. 

* Historically segregated and entrenched spatial planning that affect travel costs

25 Oct 2017

Rand dives on SA's debt outlook

The rand has not reacted to well to Finance Minister Gigaba's maiden mini budget speech. It is currently trading at 13.98 to the dollar, a fall of more than 20 cents from an hour ago. 

READ: Rand dives on SA's debt outlook

25 Oct 2017

Gigaba outlines 'twin challenges'. 

"Honourable members, we have an unenviable TWIN challenge of growing the economy as well as ensuring that it is more inclusive," said the finance minister.

"Our starting point therefore is that economic growth and transformation are mutually-reinforcing principles.

"We cannot allow a repeat of the past where periods of relatively high economic growth were characterised by an uneven accrual of economic benefits," he said. 

25 Oct 2017

Growth lower than National Development Plan projections 

Gigaba said government was lagging behind the growth projections of the National Development Plan - the state's long-term blueprint to grow SA's economy.  

"Disappointingly, between 2010 and 2016, the level of economic growth compares very poorly against our NDP ambitions," said Gigaba. 

"GDP per capita has declined for two consecutive years, millions of South Africans are living in poverty, unemployment is 27.7 per cent – the highest level since September 2003, and is most harshly felt by our youth," he said. 

25 Oct 2017

Gigaba urges SA to not miss out on African economic growth 

While Gigaba said that SA growth will only average 0.7% for the remainder of 2017, SA could boost its economy by looking to Africa. 

"As the global and African economy improves we need to better position ourselves to take advantage of the improved global outlook and, in turn, strengthen our medium and long-term growth prospects," said Gigaba.

"There is no magic bullet to do this; much depends on the policy choices made and theeffectiveness of their implementation."

25 Oct 2017

Growth down to 0.7%

Gigaba has said that SA's economic growth projections have been downgraded downwards from 1.3% - as tabled at the time of the main budget - to 0.7 per cent for the remainder of 2017.

"Growth is subsequently expected to increase slowly reaching 1.9 per cent in 2020,' he said. 

Gigaba's growth outlook is in line with local economists, the SA reserve Bank and the World Bank.  


25 Oct 2017

Gigaba calls for 'common solutions'. 

"We need business, labour and civil society to come together to forge common solutions to growing the economy inclusively, and on a more radical and sustainable basis," said the finance minister.

"Together, we must forge not only common dreams and commitments, we must become the architects of the dreams and ideals we share.

"Time is of the essence.Our people want progress; they want tangible improvements in their lives," he said. 

<p><strong>Gigaba calls for 'common solutions'.&nbsp;</strong></p><p>"We need business, labour and civil society to come together to forge common solutions to growing the economy inclusively, and on a more radical and sustainable basis," said the finance minister.</p><p>"Together, we must forge not only common dreams and commitments, we must become the architects of the dreams and ideals we share.</p><p>"Time is of the essence.Our people want progress; they want tangible improvements in their lives," he said.&nbsp;</p>

25 Oct 2017

Gigaba promises 'honest view' of the challenges facing country 

"It is not in the public interest, nor is it in the interest of government, to sugar-coat the state of our economy and the challenges we are facing," he said in his maiden mini budget speech.

"It is only when we understand these challenges fully and candidly that we will know what to do and can decide what course we must take in addressing them, as well as what trade-offs we must make in the national interest."

"The fiscal framework we present to you recognizes this and does exactly this. The period ahead is not going to be an easy one," he said. 

25 Oct 2017

Gigaba has started his maiden mini budget address, after about 20 minutes of interruptions from the EFF - who referred to him as a "Gupta stooge". 

25 Oct 2017

The EFF has left the house. Gigaba is about to start speaking. 

25 Oct 2017

Parliament Speaker Baleka Mbete has said she will not be "lectured to" by the EFF's Floyd Shivambu, as she asks for calm to let Gigaba's speech start.  

25 Oct 2017

Speaker Baleka Mbete is asking the EFF to cease their interruptions and follow Parliament's rules. 

The start of the budget has already been delayed by 15 minutes. 

Floyd Shivambu of the EFF has said that the EFF will not allow a "criminal" to address Parliament, referring to Finance Minister Gigaba. 

25 Oct 2017

The rand has sparked sharply to 13.83 to the dollar, as the EFF delays the start of Gigaba's maiden mini budget. 
The rand has sparked sharply to 13.83 to the dollar, as the EFF delays the start of Gigaba's maiden mini budget.&nbsp;

25 Oct 2017

The EFF has interrupted proceedings. 

"Parliament can't be seen to legitimise what is essentially a Gupta stooge," says the EFF's Ndlozi. 

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