Finance Minister Malusi Gigaba. Picture: REUTERS
Finance Minister Malusi Gigaba. Picture: REUTERS

Finance Minister Malusi Gigaba has confirmed that the government is working on the provision of free higher education "in a sustainable way".

The confirmation was buried in his reply on Thursday to the debate in the National Assembly on the Adjustments Appropriation Bill and the medium-term budget policy statement.

There has been some uncertainty whether or not free higher education — which the Heher commission of inquiry and the Davis Tax Committee have both concluded is unaffordable — is on the government’s agenda.

The controversial measure, costing an estimated R40bn, was proposed by a family associate of President Jacob Zuma.

The mooted plan to introduce it despite the government’s severe fiscal constraints is understood to have led to the departure of Treasury deputy director-general Michael Sachs, who headed the budget office.

Gigaba said simply concentrating on fiscal consolidation was not the solution to the country’s challenges. What was needed was economic growth.

"The economic slowdown requires a united response to grow our economy inclusively and to create jobs. And towards that we will have to embark on fiscal consolidation measures to cut expenditure by R25bn, enhance revenues by R15bn, implement fee-free higher education in a fiscally sustainable manner and implement ... stimulus measures that will reignite the economy.

"Everybody knows that we will announce on budget day the details of these measures," the minister said.

Higher economic growth was the best way to ensure the sustainability of public finances, Gigaba said.

"We must act urgently to boost confidence and grow the economy by applying the levers at our disposal, many of which involve ... structural reforms."

He said the message the government had conveyed to credit ratings agencies and international road shows was that it was prepared to take tough decisions and that those tough decisions did not have to wait for the national conference of the governing party.

"The difficult decisions are being taken now, even as we speak. We have outlined the framework of some of the decisions that require to be taken."

Gigaba also highlighted the need for public procurement reforms that could support growth in the economy.

"Ultimately it is implementing radical economic transformation that will take us to where we need to be as the economy," said the finance minister.

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