13 November 2007
President Thabo Mbeki chaired a meeting of the Joint Working Group at
Tuynhuys today. The Joint Working Group comprises members of the Working Groups
on Big Business, Black Business, Commercial Agriculture and Labour.
The National Treasury made a presentation on economic growth and medium term
budget policy considerations. The presentation noted the unprecedented growth
of the South African economy. This positive development has contributed to an
overall rise in living standards.
A significant share of economic success has been redistributed through the
fiscus in the form of increased social wage, public sector remuneration and
employment and growth in capital spending which has improved access to and
quality of services.
Attention was drawn to an increasing world-wide phenomenon of food price
inflation occasioned, in part, by the increase in grain prices. It also noted
that investment and consumption are not yet matched by domestic savings and as
a result generate a large current account deficit.
The presentation noted imbalances that need addressing in pursuit of growth
above six percent.
These include:
* strengthening of the management of the fiscus to ensure long term
financing of public investment
* increased spending on investment to ease capacity constraints and improving
export competitiveness
* reducing external vulnerability and lowering inflation
* micro-economic reforms to improve productivity and exports
* measures to promote innovation
* stepping up efforts in human capital formation.
The National Treasury made a further presentation on recommendations by an
international panel of economists. The recommendations will be released in the
first quarter of next year.
Government is soliciting comments from a wide variety of stakeholders.
Working Group members will similarly make their comments in due course.
Enquiries:
Mukoni Ratshitanga
Tel: 012 300 5436
Cell: 082 300 3447
Issued by: The Presidency
13 November 2007
