By Ndumiso Mlilo JOHANNESBURG (Xinhua)
-- South African experts have welcomed
the 2017 budget as progressive in the current challenges facing
The budget was
presented to the Parliament on Wednesday by the Finance Minister
Senior Lecturer, Witwatersrand School of Economics and Business
Sciences told Xinhua on Thursday that the finance minister tried
his best to balance the budget under prevailing harsh economic
Gordhan predicted a
growth rate of 1.3 percent this year from a 0.5 percent last
year. The government intends to reduce spending by 2 billion
U.S. dollars in the next two years.
The government debt
is 169 billion U.S. dollars which is 50.7 percent of the GDP.
Gordhan said the interests from debt are raising the expenditure
which the government is trying to reduce.
Mondi said, “The
tone of the minister is encouraging as he talked about
inclusivity. He was saying we are together in this. He
maintained fiscal consolidation by saying we spend what we have.
He is trying to address the economic problems using the
resources we have.”
intends to raise 2.2 billion U.S. dollars through taxes. The
budget deficit is expected to be 3.1 percent of the Gross
Domestic Product (GDP) in line with the government’s fiscal
The government is
trying to reduce expenditure through stabilizing the public
service wage bill. Mondi said there was a small room for the
finance minister to maneuver and he had to walk a tight rope of
trying to balance the interest of many people.
Mondi said, “The
global economic forces are anti-growth and we need a leader who
can address structural changes in our economy. The finance
minister is trying hard with other stakeholders even to sell the
country to the world. He is trying to encourage investment by
also not increasing corporate tax.”
The finance minister
mentioned transformation 50 times in his speech. This follows
President Jacob Zuma’s call for the radical economic
transformation during the State of the Nation Address this
chief economist of Investment Solutions also welcomed the budget
as being progressive. Mothata said the world has seen weak
economic growth in the last eight years and that influenced the
finance minister in coming up with the fiscal consolidation.
Mothata said Gordhan
is also faced with the task of ensuring that there are funds for
capital expenditure like the infrastructural projects done by
the State Enterprises.
Mothata said the
finance minister’s budget come at a time when there is
inequality and low business confidence.
He said, “The
minister was faced with complex issues and world economic
dynamics but there is a commitment to infrastructural spending
through revenue coming in. Gordhan left the economic growth to
the markets. What’s key on the budget is investment and he tried
to balance the books.”
The finance minister
said the state enterprises have a critical role to play in
infrastructural projects. Their borrowing needs will be
accommodated in the fiscal framework.
Mothata said across
the world there is a call to have inclusiveness hence the need
for economic transformation.
The economist said
the government should consider concentrating on micro economies
like the township economic developments. The economic growth
should not be concentrated on big towns but include the
First National Bank
Economist Mamello Matikinca also said the budget is promising.
She welcomed the awarding of huge budget on education saying the
youth needs to be skilled to contribute positively to the
She also welcomed
the budget’s identification of tourism as a potential
contributor to the economic growth and Agriculture after the
Matikinca said, “The
focus of the budget is optimistic. The minister has done an
incredible job to avert the country’s downgrade and the budget
is also a step in that direction.”
She, however, called
for more private sector participation and improvement in the
A tax expert, Kyle
Mandy, partner and head of National Tax Technical at PwC South
Africa, welcomed the introduction of a 45 percent for those with
taxable income of 116,000 U.S. dollars.
He said the tax will
help revenue shortfalls. He, however, warned that the higher
taxes are becoming too high to cause some high earning
professionals to move to other countries.
He also praised the
finance minister, saying “We are on the right path on fiscal
consolidation and spending within our means. The minister is
doing a sterling job to keep us in the right direction. Had it
not been for Treasury we could be like Greece.”