2010 Budget Policy Statement

27 October 2010

The ANC Parliamentary Caucus welcomes government`s 2010 Medium Term Budget Policy Statement presented to the National Assembly this afternoon by the Minister of Finance, Pravin Ghordin. We congratulate SARS for its exceptional performance in revenue collection, which ensured that it exceeds the target. South Africans should also be commended for their positive response.

The Statement has put a strong focus and emphasis on the robustness of the South African economy within the context of the prevailing financial market economic crisis. The SA economy is on the recovery path, much better than other developing and developed countries – with the exception of China, Brazil and India. The statement has anchored the role of emerging economies - a clear example that our path to recovery can emulate those economies.

The Statement also speaks to the new economic growth path that the Cabinet announced yesterday and is in the process of consultation with social partners.

The Statement puts at the centre of our recovery path the countercyclical fiscal policy measures that we have followed in the past years, which to a large extend made it possible for the SA economy to sustain infrastructure spending and social infrastructure security net.

However, countercyclical measures alone are not sufficient to propel new economic growth path. The ANC therefore support the call for new economic growth path and broad based social engagement on issues such as price stability, skills development, youth employment and the achievement of the Millennium Development Goals.

The statement reflects the willingness of the government to use both monetary and fiscal policy instruments to mitigate the impact of joblessness.

We are also encouraged that the Statement speaks to the current challenges pertaining to the appreciation of the rand. We welcome the acknowledgement that while the inflow of foreign capital into the SA economy, which is attracted by our prudent fiscal policies, has positive economic benefits, there is realisation by the relevant authorities that the sustained appreciation of the rand has both positive and negative impact on the economy.

We welcome various measures proposed in the Statement to encourage participation of independent power producers in the energy sector to complement efforts by Eskom to meet the expected increase in household and industrial power consumption. This will, amongst other things, enhance our economic growth and create jobs.

Enhanced measure to fight and combat fraud and corruption are welcomed. The measures are in line with the ANC`s commitment to intensify the fight against the cancer of crime and corruption (particularly in the public sector) as it paralyses our government`s effort to deliver quality services to our people.

Issued by
The Office of the ANC Chief Whip
ANC Parliamentary Caucus
Parliament of the Republic of South Africa
Cape Town

Moloto Mothapo 082 370 6930