Latest / Drive with John Perlman / The Medium Term Budget Policy Speech by the Finance Minister

Transcript

The Medium Term Budget Policy Speech by the Finance Minister · Drive with John Perlman

• 0:00
  Speaker 1: You're with John Perlman on 702. 702 Drive, 23 minutes
• 0:06
  Speaker 1: past three. So as not to disappoint, can I just say,
• 0:10
  Speaker 1: we don't want songs with color in the name of
• 0:12
  Speaker 1: the song. We want songs by either bands or artists
• 0:16
  Speaker 1: who have a color in their name. So if you
• 0:19
  Speaker 1: send me blue suede shoes, much as I like the song,
• 0:22
  Speaker 1: I'm not going to be able to play it because
• 0:23
  Speaker 1: that's not right. what we're looking for.
• 0:26
  Speaker 2: Whoa.
• 0:27
  Speaker 1: Okay. Did we get what we're looking for out of
• 0:29
  Speaker 1: the medium term budget policy statement? The speech delivered, uh,
• 0:34
  Speaker 1: ending just around three o'clock today by finance minister, Stephen Curtis, uh,
• 0:40
  Speaker 1: host of the money show, uh, joins us now to
• 0:42
  Speaker 1: tell us what he heard and what matters. Stephen, a
• 0:45
  Speaker 1: very good afternoon to you. Some relief on fuel, but overall,
• 0:49
  Speaker 1: for South Africans struggling, how much good news, if any,
• 0:53
  Speaker 1: did the minister have? Good afternoon.
• 0:54
  Speaker 2: Good afternoon, John. Look, there's good news, but whether it
• 0:58
  Speaker 2: affects us is a different question. So, yes, the fuel
• 1:01
  Speaker 2: relief will affect us, especially for November and a bit
• 1:04
  Speaker 2: into December. I'm not sure how we're going to get
• 1:06
  Speaker 2: home in January, but anyway... So that's the one thing.
• 1:11
  Speaker 2: But the main good news is because of the increased
• 1:14
  Speaker 2: revenue that's been coming in. Now, we've been talking a
• 1:18
  Speaker 2: little bit about how higher gold and platinum prices have
• 1:20
  Speaker 2: meant higher royalties coming into government, but also higher corporate tax,
• 1:25
  Speaker 2: higher VAT receipts. I mean, that's important, especially in these
• 1:29
  Speaker 2: constrained times. And then, John, the idea of a fiscal anchor.
• 1:33
  Speaker 2: So this is the first kind of explicit kind of
• 1:37
  Speaker 2: announcement that there will be one. It's not going to
• 1:40
  Speaker 2: be a numerical rule. Government is not doing that. What
• 1:43
  Speaker 2: they're saying is that each administration, so after each election,
• 1:46
  Speaker 2: each administration would state how it's going to manage its debt.
• 1:50
  Speaker 2: And basically, it would go from there. The Financial and
• 1:52
  Speaker 2: Fiscal Commission will have powers to independently assess whether a
• 1:56
  Speaker 2: government is actually doing that. And what that does is
• 1:59
  Speaker 2: it basically ties incoming governments to say to international lenders,
• 2:04
  Speaker 2: this is what we're going to do about debt. But
• 2:06
  Speaker 2: the other big story, of course, is just how things
• 2:09
  Speaker 2: are shaping up. Our debt is going to peak and
• 2:12
  Speaker 2: we'll get less. And that's very important because most countries
• 2:16
  Speaker 2: around the world, so many countries around the world are
• 2:19
  Speaker 2: battling this problem. This is why we've seen bond yields
• 2:22
  Speaker 2: spiking in places like the US and Japan and France
• 2:25
  Speaker 2: and the UK. So in an environment where everyone else
• 2:29
  Speaker 2: can't repay their debt, we are. And I think that
• 2:31
  Speaker 2: helps us to stand out. And the other thing, yeah,
• 2:35
  Speaker 2: go on.
• 2:35
  Speaker 1: No, no, please carry on.
• 2:37
  Speaker 2: Just one other thing for the crypto community, you know,
• 2:40
  Speaker 2: the National Treasury and the Reserve Bank issued a set
• 2:42
  Speaker 2: of proposals And everyone I knew in that industry was angry. Basically,
• 2:47
  Speaker 2: the minister saying, look, we've heard you. We will think
• 2:50
  Speaker 2: again and we'll come at it a different way. So
• 2:51
  Speaker 2: that's good news for them.
• 2:53
  Speaker 1: And just in terms of an overall sense, you know,
• 2:56
  Speaker 1: every time we either have a state of the nation address,
• 2:59
  Speaker 1: but more particularly an address from the Minister of Finance,
• 3:03
  Speaker 1: and this goes back to ministers before Minister Godongwana, we
• 3:06
  Speaker 1: get a sense that there's going to be some kind
• 3:10
  Speaker 1: of tighter control on government wastage, spending on inappropriate and
• 3:16
  Speaker 1: and really impractical things. Are we hearing more of the
• 3:19
  Speaker 1: same or are there indications that there's some more creative
• 3:23
  Speaker 1: thinking out there?
• 3:25
  Speaker 2: Yeah, I wouldn't be a budget without those, John. Yes,
• 3:28
  Speaker 2: so we're kind of hearing more of the same. Look,
• 3:31
  Speaker 2: I think the love is getting a bit tougher. There's
• 3:34
  Speaker 2: a lot of help that's coming for municipalities. And by
• 3:37
  Speaker 2: the way, spending on infrastructure as well. The problem is
• 3:40
  Speaker 2: we have heard some of that before. And I mean,
• 3:42
  Speaker 2: sometimes when you're in politics, you do have to repeat announcements.
• 3:45
  Speaker 2: I understand that. I'm not saying the minister is doing
• 3:48
  Speaker 2: just that. The problem is the execution. I mean, we've
• 3:50
  Speaker 2: heard in the last year, I think it was less
• 3:52
  Speaker 2: than 17% or so project tenders were actually issued. You know,
• 3:57
  Speaker 2: there's a huge problem in the execution. The Minister of
• 3:59
  Speaker 2: Public Works and Infrastructure, Dean McPherson, has stated, has repeated
• 4:03
  Speaker 2: that figure. So we know that to be true. So yes,
• 4:08
  Speaker 2: there is that. Yes, there's an acknowledgement that there's a
• 4:11
  Speaker 2: local government election happening. Nothing concrete, John, that I would
• 4:16
  Speaker 2: say this to me shows there's going to be a
• 4:18
  Speaker 2: real change. Bear in mind how difficult change at the
• 4:22
  Speaker 2: local situation is because it's all about politics. I mean,
• 4:25
  Speaker 2: you know, that for me is the root cause.
• 4:27
  Speaker 1: Of it all. Thank you so much, Stephen Curtis. Stephen,
• 4:30
  Speaker 1: back at about 25 past four with all the market news.
• 4:34
  Speaker 1: I'm certain some links between the numbers and what the
• 4:37
  Speaker 1: minister had to say. And then after five, the complex
• 4:40
  Speaker 1: politics behind the numbers. Kai Satole joining us for his take.
• 4:45
  Speaker 1: That's at 10 past five.