Finance Minister Nhlanhla Nene says due to global and domestic economic constraints, tabling this year’s budget was very difficult.
The Minister said achieving fiscal stability amid the current economic climate meant government had to do something about the expenditure ceiling and revenue.
He said this at the New Age Business Briefing after he was asked about proposals he tabled to the National Assembly on Wednesday.
The Minister proposed, among others, a 1% increase in personal income tax for those earning above R181 900 per annum and an overall increase in fuel levies of 80.5 cents per litre. 30.5 cents of this is an increase in the general fuel levy and 50 cents is for the Road Accident Fund (RAF).
He said difficult decisions needed to be taken as fiscal consolidation could no longer be ignored.
“Budgeting is about trying to satisfy unlimited wants with limited resources. I think that is when reality begins to assist us to understand what it is that we are grappling with.
“In order to meet the unlimited needs and wants with limited resources… you need to do something about your expenditure and revenue, and we did both.
“We put out a package in October when we tabled our Medium Term Budget Policy Statement. That package recognised the reality that the difference between our expenditure and our revenue was growing in the negative direction as a result of the global and domestic issues,” he said on Thursday.
The Minister needed to raise a revenue shortfall while containing spending.
Government still needs to electrify three million households
One of the guests asked the Minister, meanwhile, for an update on the announcement that government was doing a review of assets that could be sold from State Owned Entities like Eskom to raise revenue.
The Minister announced this when he tabled the Medium Term Budget Policy Statement.
Minister Nene said processes to dispose of state assets were at an aanced stage and that the detail of the processes were at this stage too sensitive for public consumption.
“We are also looking carefully at where the state needs to be in order to serve the public interest. Where is it that the state should not be in order to allow the private sector to play its part?
“We still have about three million [households] that are not connected to the energy grid. If you leave that in the hands of the private sector now not having completed the task, it would be irresponsible of the state.
“Therefore, it is important that we do help Eskom but open up to the private sector as we move along.”
Source : SAnews.gov.za