statement by Bantu Holomisa and Roelf Meyer

The release of Finance Minister Trevor Manuel’s medium-term budget policy statement has introduced a new, transparent direction for South African fiscal policy. For this he needs to be congratulated.

Although all the news is not encouraging, especially the scaled-down forecast for growth of the GDP, the opening up of fiscal policy planning is a fresh approach that will prove to be of immense assistance to local and foreign investors. It also expresses a much-needed confidence in the capabilities of the department and ministry of Finance and the general direction in which South African fiscal policies are heading.

One concern, though, is regarding the introduction of a contingency and policy reserve, totaling R5bn. Proper control of these funds would be needed to prevent irregularities and the improper application thereof. Clear control guidelines need to be spelled out by the minister.