STELLENBOSCH- Eliminating corruption and wasteful expenditure will be the corner stone of South African economic development.
The Minister of Finance, Pravin Gordhan, delivered the South African National Budget Speech of 2014-2015 to Parliament on 26 February. Gordhan highlighted the importance of spending reviews and performance evaluations in order to reduce corruption and increase employment and growth.
The chairperson of the Finance Committee of Parliament, Mr Thabadiawa Alfred Mufamadi says that “South Africa have moved from consumption to capital expenditure” and that “we are on the right to track in terms of economic development”.
The CEO of Nedbank, Mike Brown, says financial markets will respond positively to the budget. Brown says, “We confidently told the world that we have a plan for economic growth and development and that plan is the National Development Plan”.
During the next three years government will spend R8.7billion on the settlement of land restitution claims and R7 billion in support of subsistence and smallholder farmers.
However, the Pan African National Congress responded to the Budget Speech by saying the party is not happy with the amount of money that has been allocated to land reform and agricultural development.
Mr Gordhan emphasized the centrality of the public sector in creating jobs and that the government will merely play a supportive role.
The small to medium enterprises in South Africa will receive R6.5 billion in state support over the next three years. This is a comprehensive support package that will stimulate greater levels of economic activity and reduce unemployment.
South Africans will experience a personal income tax relief of R9.3 billion. Tax relief measures will also be put in place to support small enterprise development.
The Tax Director of Deliote, Izelle du Plessis, says that the budget is well balanced in terms of a tax perspective without “populist sentiments”. Du Plessis says that the postponement of tax on CO2 emissions will provide government time to make it more “user friendly”.
A tax expert, Dr Allan Moolman, stated that Gordhan placed a lot of weight on fiscal discipline. Moolman says it is clear that government is trying to ensure that wasteful expenditure is reduced and that money is spent more effectively. Moolan continued saying that the increase in government expenditure is a result of inflation.
In his speech Gorhan said, “It is time for a bold vision of our future, as set out in the National Development Plan. It is time for action and implementation. It is time to move South Africa forward to the next stage of our historic journey to more rapid growth, jobs and development — time to leave behind poverty, joblessness and inequality”.