Finance minister Pravin Gordhan has highlighted the role that ICT will play in government's growth and development plans for the coming six months.
Speaking at the medium term budget policy presentation, the minister explained that ICT development and innovation will play a role in reinforcing the country's current policy framework and promote local development.
At last year's medium term budget framework, Gordhan's predecessor, Trevor Manuel, did not include any reference to the use of ICTs in the development of the country.
Gordhan said that National Treasury is working with several other ministers, including communications minister Siphiwe Nyanda, trade and industry minister Rob Davies, science and technology minister Naledi Pandor, as well as economic development minister Ebrahim Patel.
These ministries together form the economic cluster and are tasked with specific development goals for SA.
Together, the cluster will be looking at boosting the economy through the “development of our mining industry, lowering costs in telecommunications and transport, expanding tourism, enhancing technology and developing further trade opportunities, drawing where appropriate on international experience”.
Despite the economic slowdown and an expected decrease in tax income to treasury, the minister says government has not slowed its spending. While the minister has cautioned that no excessive spending will be tolerated, key projects will still be getting funding.
“Whereas in other parts of the world spending is being cut and projects cancelled, we are able to continue our investment plans, because we entered the economic downturn with a budget surplus and a healthy fiscal position.”
Consolidated budget revenue is now expected to be R658 billion in the current medium term of 2009/10, which is down R34 billion from February's estimates. However, consolidated government expenditure will rise from R715 billion to an estimated R841 billion.
The minister expects tax income to increase over the next three years, which he says will bring the accounts back into balance.
However he noted that the South African economy has seen a serious decline and the real GDP outlook for SA could be as bad as a 1.9% contraction over 2008. He believes the economy will swing back next year, with an expected growth of 1.5%, rising in 2011 to 2.7%.
“To succeed in global markets requires South African firms to achieve new levels of productivity on a continuous basis. This quest has to be supported by effective public policies and public institutions,” said Gordhan.
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