Minister Meyer hosted the 2017 Fiscal Policy Seminar on 3 November 2017 with the theme of “A Fiscal Strategy for Growth”. The seminar seeks to promote the notion of shared fiscal and economic ideas across government, private sector and academic institutions.
The 2017 Fiscal Policy Seminar highlighted that South Africa is currently finding itself in a constrained environment of deteriorating economic growth, policy uncertainty and perceived unstable political environment. There is therefore a need to continue the good governance agenda that would improve consumer and business confidence and an environment conducive to attracting investment, and enabling economic growth which results in employment opportunities.
Monetary policy is adequately responsive to the economic environment. Therefore, key solutions required to address the issues facing the economic environment revolve around sound and responsive macro-economic policies more specifically structural reforms as to increase productivity and potential output by reducing barriers. A specific focus should be placed on growing the economy in an inclusive manner and identifying mechanisms toward a sustainable fiscal framework through fiscal policy reform.
The 2017 National Medium Term Budget Policy Statement (MTBPS) outlined that improving the economic growth outlook over the period ahead remains the biggest challenge. National government reaffirmed their collective commitment to inclusive growth, transformation and competitiveness. Further highlighting the following fiscal risks: underperformance of the economy and revenue projections; more pronounced strain and imbalances within public finances as the public sector wage bill increasingly crowds out other spending; the rising share of debt-service costs on the national fiscus; the build-up of unpaid accounts and fiscal imbalances; and the continued deterioration of major state-owned companies. Should these risks materialise, there would be significant implications for both national and provincial fiscal policy context and place fiscal sustainability at risk.
Government remains committed to a path of fiscal consolidation and the only sustainable solution for the development and the health of public finances is to grow the economy inclusively.