The Inkatha Freedom Party today welcomed the medium-term budget tabled by Finance Minister, Trevor Manuel, but expressed concern with, among other things, the amount of money that has been set aside for increases in social grants. 

"The IFP has consistently advocated a substantial increase in welfare benefits for all who qualify for them. We believe that appropriate social assistance means just that: social support grants need to be continually and more flexibly re-evaluated on the basis of need amid changing economic and personal circumstances. During the current economic climate in South Africa we believe that the R20 per month increase in social grants, as announced by Minister Manuel today, is far from satisfactory," said Narend Singh, IFP Finance Spokesperson. 

Nevertheless, the IFP is pleased with the increase in spending on the School Nutrition Programme and the Hospital Revitalisation programme. 

"The IFP believes the biggest indictment of democracy in South Africa is that poverty has worsened, and is in fact more prevalent today than at any time in our recent past. Neither the levels of economic growth nor the various measures the government has taken to date have been sufficient to free the poor from their poverty trap. Many poor South African children only receive one meal a day, the meal they receive at school, and we therefore welcome the increase in spending on the school nutrition programme.

Furthermore, the IFP today welcomed the Minister's plans to focus and prioritise intensive development initiatives. "Government recently admitted, with the release of their "Towards a 15-year Review" report, that not enough has been done to address trends in poverty and joblessness. The expected slowdown in our economy, from 3.7% in 2008 to 3% in 2009, will without a doubt have a detrimental effect on poverty and unemployment in SA.  

The IFP believes that a strong focus on micro-economic policies and removing impediments to job creation in the labour market is of utmost importance. 

"The IFP proposes than an urgent forum comprising of government, business, and representatives of labour unions be convened so that pertinent issues regarding job creation and entrepreneurship can be discussed."

Minister Manuel reassured the South African public that the banking system and financial institutions can weather the current international financial crisis and announced that over the next three years spending will be prioritised on education, healthcare, fighting crime, rural development and 2010 infrastructure. 

"We agree that spending is necessary on infrastructure, this is critical. We are short of power stations, our harbours are a disgrace and the rail system cannot cope, while our roads are in a dismal state. But we hope that the infrastructure spending ahead of the 2010 World Cup will be sustainable in the long term." 

In conclusion Mr Singh said: "The IFP hopes that the current crisis of leadership within the ruling party will not affect the overall government economic policy beyond this mid-term budget. We hope that in the long term the ANC's economic policy will remain unchanged in the face of challenges by the ANC's alliance partners who want a more interventionist, expenditure-driven economic model. These reassurances are needed for investor confidence and continued growth at a time when we face an international economic crisis."

FOR FURTHER INFORMATION CONTACT:
Narend Singh, 0837885954
or Liezl van der Merwe: 083 611 7470