Finance Minister Pravin Gordhan did not provide enough in his budget to boost economic growth, and a sovereign rating downgrade to junk status was "now a matter of time", Democratic Alliance (DA) finance spokesman David Maynier said yesterday.
"In the end, the minister did not have enough political clout to deliver on economic growth and state-owned enterprises," Mr Maynier said.
While a minority equity partner was envisaged for South African Airways, no plans were announced to privatise either the airline or other failing state-owned enterprises. The sale of nonstrategic state assets could have raised billions of rand in revenue, Mr Maynier said.
He noted that the primary driver of economic growth in the National Development Plan (NDP) was infrastructure development, but not enough was set aside in the budget for this.
"A total of 10% of gross domestic product (GDP) should be spent on infrastructure development in terms of the NDP.
"However, the budget reveals that spending on infrastructure is lower than 10% of GDP and will actually decrease as a percentage of GDP between 2016-17 and 2018-19," Mr Maynier said.
The government’s infrastructure spending as a percentage of GDP over the next three years is projected at 6.38%, 6.12% and 6.05%, respectively.
The DA was disappointed that the minister did not announce real spending cuts, including a reduction in the size of President Jacob Zuma’s bloated Cabinet, which could save up to R4.7bn per year. The party was "shocked" no significant additional funding was allocated for drought relief.
"The estimates are that the immediate requirements amount to R4.2bn in 2016-17.
"Unless this issue is dealt with, there will be severe consequences for the availability and prices of food for all South Africans and particularly poor households," Mr Maynier said.
The DA welcomed the additional R4.8bn for higher education in 2016-17 but noted that this still left a significant funding shortfall, estimated at about R3bn, for students qualifying for funding from the National Student Financial Aid Scheme.
The party was disappointed Mr Gordhan did not announce a three-year rollover of the employment tax incentive, which lapses at the end of this year.
"We believe the minister should announce a comprehensive spending review aimed at identifying savings and eliminating wasteful expenditure in all three spheres of government," Mr Maynier said.
The review should focus on the composition and efficiency of spending in all three spheres of government and evaluate future spending priorities for the nuclear build programme, National Health Insurance and the public sector wage bill.