2018

Budget Speech

Minister Malusi Gigaba

Minister of Finance

21 February 2018

Honourable Speaker Mister President

Cabinet Colleagues and Deputy Ministers

Governor of the Reserve Bank

MECs of Finance Fellow South Africans

Ndi masiari

Sanibonani

Molweni

Goeie middag

Thobela

Dumelang

Avhusheni

As I begin, let me first table before this august House:

At the very advent of our democracy, as the nation was emerging from more than three centuries of colonial oppression, which President Nelson Mandela described as an “extraordinary human disaster that [had] lasted too long”, he urged that out of that experience had to be born a society of which all humanity would be proud.

To our highly expectant nation, he addressed the following words, that:

“Our daily deeds as ordinary South Africans must produce an actual South African reality that will reinforce humanity’s belief in justice, strengthen its confidence in the nobility of the human soul and sustain all our hopes for a glorious life for all.”

Indeed, during the past twenty-three years, we have as a people striven to live up to these injunctions conferred on us by that great Leader of our people.

It is correct that as we celebrate the centenary of his birth, we should recall his words, his thoughts and injunctions, indeed his dreams for our nation, in order to remind ourselves of the mammoth journey that still lies ahead of our efforts to build this society, the country, of which humanity would be proud.

Almost twenty-four years later, President Ramaphosa captured the moment and mood aptly, in delivering his inspirational inaugural State of the Nation Address, when he said that a new dawn was upon us and urged us to renew our nation’s promise.

Declaring this a year of change, renewal and hope, he urged us to honour both Madiba and Mama Albertina Sisulu “not only in word, but, more importantly, in direct action towards the achievement of their shared vision of a better society.”

This was a profound statement, echoing the hopeful and unifying sentiments of the founders of our democracy and the living dreams of the peoples of our country.

The President proceeded to outline an abiding vision for our country that has resonated with all our people, fired all of us with hope and enthusiasm, and ignited a sense of renewal.

Towards the realization of this vision, the Budget we present today is an opportunity to reflect on the state of our nation’s finances, and the economy more broadly, but most importantly, to understand how these support our social and economic objectives.

This is the challenge of our time, to build a South Africa in which all people have a decent standard of living, access to economic opportunities and opportunity to pursue their dreams.

It is these core aspirations which the Budget must speak to, enable and indeed, advance. We stand before you with a profound sense of optimism, purpose and resolve.

All of us should heed the President’s call echoing the late, great Hugh Masekela, to lend a hand in addressing society’s most pressing challenges.

Fellow South Africans, we have the opportunity to achieve faster and more inclusive growth, to create jobs for our people and a better life for all South Africans.

That opportunity comes from a favourable global economic outlook, with many of our trading partners doing well, and from improved prices for our exports.

That opportunity comes from a fiscal framework which has improved markedly since the October medium-term budget policy statement.

That opportunity comes from a stronger rand and favourable inflation outlook.

That opportunity comes from the strong partnership which has been forged between all the social partners to prevent further ratings downgrades, and remove obstacles to investment, growth and job creation.

That opportunity comes from improving confidence, as business and consumers have responded positively to political developments over the last three months, and are anticipating progressive, ethical and decisive leadership from government.

To take advantage of these opportunities, we must act with urgency to make tangible progress on issues of public governance, inclusive growth and economic transformation.

As Julius Nyerere once said, “we must run while others walk”.

The resolve to grasp the opportunities of the present moment, has already become evident.

Government has demonstrated its resolve to confront allegations of state capture and corruption through the judicial commission of inquiry announced by former President Zuma, and the investigations being conducted by the Hawks, Asset Forfeiture Unit and other agencies.

Responding to an environment of eroding public trust in the early 20th century, former US President Theodore Roosevelt said:

"There are in the body politic, economic and social, many and grave evils, and there is urgent necessity for the sternest war upon them. There should be relentless exposure of and attack upon every evil man, whether politician or business man, every evil practice, whether in politics, business, or social life. I hail as a benefactor every writer or speaker, every man who, on the platform or in a book, magazine, or newspaper, with merciless severity makes such attack, provided always that he in his turn remembers that the attack is of use only if it is absolutely truthful."

All of us who have the honour to serve as public representatives and officials should be prepared to subject ourselves to public scrutiny.

We have demonstrated our resolve by strengthening Eskom’s board and management with highly capable, ethical and credible leadership.

This leadership has hit the ground running to turn the utility around, by decisively addressing outstanding governance concerns and restoring the confidence of stakeholders to stick with it as it improves its performance and sustainability.

The President’s intervention this week to restore dialogue on mining policy, raises hope that a solution will be found to unlock growth and transformation in this critical sunrise sector.

All stakeholders should be encouraged by the President’s intervention and commitment to set the industry on a new path of investment, inclusive growth and transformation.

We therefore welcome the Chamber of Mines’ postponement of their court action as they join this new process.

Our resolve to ensure the sustainability of the nation’s finances will become evident today, as we table a budget which carefully balances a variety of important priorities, including social investment and protection, economic investment, and the need to stabilize the growth in public debt.

After several years during which economic growth undershot our projections, we now see the improved growth projections for 2018 and subsequent years as a floor, rather than a ceiling.

We are convinced that as business and consumer confidence return, and as government follows through on its commitments to enable growth with prudent, fast and decisive action, we can exceed our growth projections.

With purpose and resolve, we can take advantage of these opportunities, and achieve the faster growth which is needed dramatically to reduce unemployment, poverty and inequality, and relieve pressure on our fiscal framework.

This is a tough, but hopeful budget.

It required us to make difficult but necessary trade-offs, important to ensure that this budget is a platform for renewal, inclusive growth and job creation.

It directs spending to our most pressing national priorities: educating our youth, protecting the vulnerable and investing in enablers of inclusive growth.

It moderates spending and raises the revenues required to contain the growth in national debt, whilst trying to minimize negative effects on growth.

It presents a budget outlook which is markedly improved since the Medium-Term Budget Policy Statement in October; it now projects debt stabilizing as a share of GDP over the medium term.

Budget 2018 charts a path out of economic stagnation, anticipating a steady increase in economic growth which will create a path to prosperity for our people, and improve our nation’s finances over time.

There are risks and spending pressures we will need to navigate carefully, but this Budget presents a roadmap to maintaining the integrity of our public finances, while protecting social services.