# Summary

- Link: https://dearsouthafrica.co.za/2019-medium-term-budget-policy-statement/summary/
- Published: 2019-11-04T14:21:55+02:00
- Author: dearSA

[ HAVE YOUR SAY ON THE 2019 MTBPS](https://dearsouthafrica.co.za/2019-medium-term-budget-policy-statement/)

We are tabling the 2019 Medium Term Budget Policy Statement in a difficult global
and domestic environment.

The global growth forecast for 2019 is the lowest since the 2008 financial crisis,
weighed down by mounting trade tensions and political uncertainty. Economic activity
in two engines of the world economy, China and India, is slowing this year. Policy
makers have taken a number of steps to support growth, but there is a risk that 
these measures will create new vulnerabilities, as interest rates in advanced economies
decline. About a quarter of government bonds in these countries have negativeyields.

At home, economic growth has continued to stagnate and weaknesses in the world economy
are likely to amplify our own shortcomings, which require structural reforms. The
discussion paper released by the National Treasury has proposed a number of economic
reforms that can boost GDP growth over the medium and longer term, and support increased
investment and job creation. These measures have been broadly agreed within government.
The next step is to implement them urgently.

In addition to low growth, South Africa’s biggest economic risk is Eskom. Ongoing
problems with the utility’s operations continue to disrupt the supply of electricity
to households and businesses. Government has set aside significant resources for
Eskom. With the immediate financial restraints lifted,
 the focus must be on operational
problems and restructuring Eskom into three separate entities. Doing so will mark
the beginning of a transition to a competitive, transparent and financially viable
electricity sector.

South Africa’s public finances deteriorated over the past decade, a trend that accelerated
in recent years as low growth led to large revenue shortfalls. For 10 years, we 
have run large budget deficits. While this provided some support to the economy,
it has put us deeply in debt, to the point where interest
 payments have begun crowding
out social and economic spending programmes. This cannot be sustained.

Government proposes a path to restore the public finances to a sustainable position.
This will mainly involve a range of expenditure reductions, some of which are likely
to be painful. We owe it to future generations to ensure that we are good stewards
of our country’s resources and that they do not have
 to pay for our decisions.

I would like to thank my Cabinet colleagues for their contributions to this challenging
budget policy process. I would also like to acknowledge Deputy Minister David Masondo,
as well as the Director‐ General and the entire staff of the National Treasury. 
They work diligently towards their constitutional
 duty to ensure transparent, sustainable
finances for all South Africans.

TT Mboweni
 Minister of Finance