Pravin Gordhan appears to be a bit of a late bloomer. His medium-term budget showed an encouraging decisiveness that many felt was lacking in the past. These include the introduction of the youth wage subsidy, stalled by labour, and clamping down on Cabinet spending.
Gordhan deserves praise for his ability to keep a tight grip on South Africa`s fiscal discipline and inflation targeting, while struggling with ideological divisions in Cabinet. These divisions, some stakeholders say, have prevented him from implementing the reforms he needs to drive growth, such as cutting back red tape surrounding small business.
His strong position on corruption remains clear and dovetails with his efforts to curb wasteful expenditure. His real challenge is going to be to reduce expenditure in local and provincial government.
It is generally believed that Gordhan`s consistent approach to the fiscus has provided assurance to ratings agencies and investors. But his inability to reduce government debt, which was 44.8% of economic output this financial year against an original government estimate of 43.2%, is seen as a black mark against his name. So, too, is a growth forecast of 2.1% against the treasury`s estimate of 2.7% in February. But one stakeholder said the treasury always tends to release overly optimistic growth forecasts.
The appointment of a tax ombud to assist consumers and small businesses has been universally supported.
The minister has followed through on his promise to improve saving by South African citizens. One area he has focused on is the retirement sector, in which there has been consultation on ways to make retirement more affordable for lower income groups. In addition, South Africa`s high levels of red tape continue to be seen as a stumbling block to growth.
Another stakeholder said Gordhan will have to tackle the present regulatory environment relating to small, medium and micro enterprises to make the environment more favourable for them, and will need to find a way to increase infrastructure spending, particularly at local government level.
Despite having to contend with a complex political environment, Gordhan has delivered a consistent performance since he came into office in 2009.