“The Minister of Finance is becoming desperate in his attempts to balance the books of the state. It is most probably because the fiscal options which the minister has at his disposal have been exhausted.” This was the reaction of Dr. Pieter Mulder, FF Plus leader, on the medium term budget framework which was released in parliament.

The FF Plus welcomes the Minister’s consistent demand that greater financial discipline in the public service is required and that the current wasting of money cannot continue. South Africa cannot keep on borrowing larger amounts of money to pay current expenses such as increased salaries while investments in infrastructure are being scaled down. It is a recipe for financial collapse in the longer term.

The Minister missed the opportunity to give clarity in his speech about the government’s policy with regards to nationalisation. Poverty alleviation and job creation is only possible if the economic growth rate can be increased. An increased growth rate depends directly on the confidence in the South African economy and the willingness to invest here. The current debate on nationalisation creates huge uncertainties internationally and leads to fewer investments in South Africa and should have been addressed.

There is also not any greater clarity as to how the proposed national health insurance will be financed. If it is to be financed through tax increases it will damage the recovery of the economy. Apparently we will have to wait until February 2012 for greater clarity about this.