Finance: ‘Restore’ culture of payment to sustain services – Mboweni

‘We need to restore a culture of payment in this country to ensure the sustainability of our services and … give confidence to those institutions who invest in our bonds,’ Finance Minister Tito Mboweni said yesterday in a Medium Term Budget Policy Statement underpinned by President Cyril Ramaphosa’s economic stimulus package and recovery plan, but also disappointingly short on detail. In the Minister’s view, the plan is ‘achievable’ – but ‘must be built on a sustainable fiscal position and low, … stable inflation’. With that in mind, notes Pam Saxby for Legalbrief Policy Watch, Mboweni appealed for an end to ‘attacks’ on the South African Reserve Bank’s (SARB’s) ‘mandate and independence’, reiterating provisions in section 224(2) of the Constitution in that regard. While SARB Governor Lesetja Kganyago and his team continue to work ‘tirelessly’ to ‘keep inflation down’, the Minister will focus on his ‘job’ – which is to ‘make the fiscus stronger’. 

Apart from announcing that sanitary pads, bread flour and cake flour will be added to the existing list of value-added tax zero-rated items from 1 April 2019, and that the imposition of ‘a higher tax rate’ penalising ‘emissions exceeding the carbon budget’ will be postponed to 1 June 2019, the statement said nothing new. It nevertheless included some alarming figures on revenue shortfalls and rising state debt that are unlikely to please the rating agencies (BusinessTech). This despite ‘government’s ongoing commitment to ‘stabilising and bringing down the debt-to-GDP ratio’. One cannot help but wonder how much longer it will take for this to bear fruit. In anticipation of public hearings next Wednesday (31 October), the National Assembly’s Standing Committee on Finance has called for written submissions on the statement by Monday.

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