Businesses have lost confidence govt’s ability to facilitate economic growth: Nene

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Finance Minister Nhlanhla Nene says businesses have in recent years lost confidence in the government’s ability to facilitate economic growth, job creation and poverty alleviation.

He was briefing the Federations of Unions of South Africa in Kameeldrift, Johannesburg.

Nhlanhla says state debt must remain within sustainable levels so the economy could be able to service it.

“I spoke earlier about the R200 billion, which is now R180 billion allocated this year in order to service our debt. As long as we are still able to service the debt and as long as we are spending the money that we borrow in the productive capacity of the country in order to grow the economy, we need to be borrowing for investment. If the composition of expenditure is for consumption then you are on dangerous territory. Whatever our borrowing is we need to reduce it to sustainable levels. “

Nene says trust between government and society is crucial in building tax morality.  He has expressed concern about a lack of tax compliance which he says has affected government revenue.

“The issue of Sars; we have seen quite a number of things that are in the pipeline that need to be done in order to restore tax morality because we have seen how tax morality has deteriorated over time. When that happens, it is a sign of loss of confidence on the state when people begin to say why must we pay taxes when our taxes are spent in a reckless manner that we have seen in the past? It is for that reason that we need to demonstrate to our people that we are spending money where it is supposed to be spent, protecting our most vulnerable, but also spending money where it is going to create jobs and investing in the productive capacity of the state. “