Minister Mboweni has defended government’s intentions of establishing a State Bank.
Finance Minister Tito Mboweni says government will stick with the fiscal framework presented in Parliament in February against all odds.
He says whatever resources might be needed, the government will make sure that the fiscal framework is not broken.
Presenting the budget vote of the National Treasury virtually, Mboweni says there are green shoots, despite the massive impact of the COVID-19 pandemic on the economy, which worsened the unemployment rate.
He says the government is implementing active measures to realign the composition of spending from consumption to investment and will stick to the fiscal framework.
“SA government continues to pursue a balanced and prudent fiscal strategy this fiscal strategy has a framework and that fiscal framework was presented in the House and we have no intention whatsoever of breaking this fiscal framework. As I’ve said before the fiscal framework is sacrosanct, we can’t break it whatever the challenges. We might be facing whatever resources we might need for one thing or the other that fiscal framework is unbreakable.”
Mboweni has defended the government’s intentions of establishing a State Bank. He says it’s necessary for financial capital to drive economic transformation as the current banking system is not fully supportive of the developmental agenda.
“There’s a need to find a financial mechanism a state ban to support the emerging black industrialists, black agriculturalists and so on its very very important but it will not just support black people we are building a non-racial South Africa but also black and white and women and cooperatives and everybody else you really have to have the experience to understand that the current banking system is not fully supportive of the developmental agenda that we want.”
Economic Freedom Fighters Chief Whip Floyd Shivhambu criticised the government for moving at a snail’s pace in establishing the envisaged State Bank.
“The state bank and the sovereign wealth fund are still not created and there’s no main plan to do so despite the public relations exercises the national treasury is still failing to use monetary policy to drive labour absorptive and localise industrialisation.”
However, Democratic Alliance MP, Deon George, argued against the establishment of the bank, claiming that it will be a failure just like other state-owned entities.
“Despite these spectacular failures government intends to establish a state bank this will merely serve as a new method for corruption to steal more just faster and more efficiently.”
Other political parties called for the urgent tabling of the Procurement Bill to Parliament saying it is long overdue.
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