Helen Suzman Foundation Comments on the 2010/11 Budget

Thursday, 18 February, 2010 - 16:01

Continuity is important for ongoing policy development and implementation, and does not result in shocks to either society or the markets. Thus the single most important determinant of this year’s Budget was last year’s insofar as the changes are ones of emphasis and not of direction. Obviously this Budget must also be read within the context of the three year expenditure cycle. The Budget comes within a context of what some commentators believe is the tail end of a world recession. Thus the Budget is mindful of global pressures and uncertainties on domestic economies.

Continuity is important for ongoing policy development and implementation, and does not result in shocks to either society or the markets. Thus the single most important determinant of this year’s Budget was last year’s insofar as the changes are ones of emphasis and not of direction. Obviously this Budget must also be read within the context of the three year expenditure cycle. The Budget comes within a context of what some commentators believe is the tail end of a world recession. Thus the Budget is mindful of global pressures and uncertainties on domestic economies.

The Budget displays a fairly conservative approach to fiscal expansion while at the same time the Minister has assured the Reserve Bank that its primary brief, notwithstanding monitoring growth and jobs, will still be inflation targeting, thereby reassuring a continuity of monetary policy.

Spending on social services accounts for more than half the budget allocation, an annual increase of 9.3 percent. The Foundation notes the increase in social service spending. This raises a concern that the funding for this increase will have to come from borrowing.

The Foundation warmly supports the Minister’s initiative around health reform with particular reference to the development of sustainable public private partnerships. The Foundation is particularly supportive of the attention which the Minister has paid to education. The Foundation looks forward to the Ministries of Education Budget votes and how they propose to implement greater accountability and overview.

The emphasis which the Minister placed on robustly tackling corruption is to be welcomed. Given his extraordinary successful tenure at SARS, the Foundation believes that he will bring that experience and industry to his oversight function in his present capacity.

The great challenge which the country faces and which this budget cannot address is broadening the tax base in order to finance government expenditure, as far as is possible without borrowing.

At the conclusion of his Budget delivery, the Minister quoted Amartya Sen’s new work ‘The Idea of Justice’. Sen argued that ‘the idea of justice calls for comparisons of actual lives and inequities, rather than a remote quest for ideal institutions’. This view has no doubt informed much of the Minister’s thinking.

Inspired by Sen’s work, the Helen Suzman Foundation dedicated a special edition of Focus to Images of Justice (no. 55, 2009). In a leading article, the Foundation posed the question: If justice is, as many argue, principally a property of institutions, how well have our institutions fared, and how well have we been their stewards and guarantors? Have our collective practices and their outcomes served the objectives of justice? May our citizens, for instance, reasonably expect a fair hearing before the courts of law? Will our children be able to fulfill their creative potential and realise their capabilities in light of the education they receive? Are we doing the right things to address and alleviate the ravages of poverty on present and future generations?  

The Foundation believes that Minister Gordhan’s Budget is a serious attempt to give meaning to a quest for justice. It is a workmanlike budget and, thankfully, predictable. The Foundation assumes that the larger vision about the growth trajectory for the country is being forged in the Planning Commission.

Francis Antonie
Director
Helen Suzman Foundation

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