A presidential task team is considering a range of steps to bring public finances back onto a sustainable path, Finance Minister Malusi Gigaba said on Monday.
He said announcements would be made at the time of the 2018 budget.
Replying to question by DA finance spokesman David Maynier, Gigaba said that before the tabling of the 2017 medium term budget policy statement, Cabinet had proposed narrowing the budget deficit by reducing the contingency reserve from R10bn to R3bn in 2018/19, and from R20bn to R5bn in 2019/20. These measures were included in the medium term budget policy statement.
In reply to another question by United Democratic Movement MP Nqabayomzi Kwankwa, Gigaba said there was no need to review the constitution regarding the mandate of the Reserve Bank which is "to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic".
"The current constitution and legislation governing the Reserve Bank is very broad, and does not constrain government from adopting (and legislating) appropriate policies to facilitate inclusive growth and job-creation, achieve the objectives of the national development plan, and reduce inequality and deliver basic services to all those residing in SA," Gigaba said.
"The Reserve Bank’s monetary policy mandate cannot be separated from government’s fiscal policy mandate and performance. Any attempt to amend these constitutional provisions without due regard for this relationship will generate unnecessary uncertainty, and impact negatively on growth and jobs," he said.
"The existing monetary policy framework, through flexible inflation targeting, allows for temporary deviations of inflation from the target in the event of shocks over which monetary policy has no impact. A specific tolerance level around the target would therefore not be necessary. An explicit tolerance indicator may potentially risk de-anchoring inflation expectations, and thereby constrain the SARB’s ability to respond flexibly to an inflation shock," said Gigaba
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