The deputy minister of finance Mcebisi Jonas made the remarks at the National Treasury-World Bank Workshop on Fiscal Policy and Inequality in Pretoria.
“We meet today against a backdrop of economic uncertainty, we face structural domestic constraints to growth and the outlook for global growth remains gloomy,” said Jonas.
“Many of our trading partners in the emerging markets are turning inward as they address their own structural challenges, and also face the prospect of a period of weak growth. “
Jonas said lower-than-expected-GDP growth and consequent lower-than-expected-tax-revenues over the next few years have led the country to shave its planned total government expenditure budgets.
“It is an environment that makes it all the more difficult for us to address the triple challenges,” he added.
Jonas said the Medium Term Budget Policy Statement (MTBPS) unveiled by Minister of Finance sought to address three strategic priorities namely stabilising public finances, growing a productive economy and increasing the real value of the social wage.
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This is expected over the long-term to solve the core problems facing the country.
“This was an MTBPS grounded in our current realities, but with an eye on the future. Though special focus is given to the deficit and debt, low deficits and debts are of themselves not the end goal, we are clear, our aim is to achieve radical economic transformation,” added Jonas.
Jonas also added that a radical economic transformation must also be a sustainable economic transformation.
“We recognise that the current environment makes achieving our social objectives more difficult, and so we must make hard choices to achieve them,” he said.
“Put plainly, the message of this MTBPS is that the total government spending ceilings are firm and cannot be breached. To do otherwise would be reckless and would compromise implementation of the National Development Plan.”
Jonas also said the measures to reduce the budget deficit and stabilise public debt will allow us to ensure the sustainability of the most important public spending programmes.
“They are measures that complement reforms under way to encourage lower consumption, higher savings and productive investment. These measures will re-establish a sustainable foundation for public finances and open the way for investment-led growth.”