The Committee acknowledges that the MTBPS is tabled during a time when world economies, including South Africa's, are in economic difficulty. This presents serious challenges including decreased revenues, job losses and increased dependence on social programmes. The economic meltdown and projected decline in the tax revenue, in the near term, may require changes in medium term budget proposals. This will in turn necessitate that domestic policies ensure that funds are directed to those sectors and programmes which have the greatest impact on the lives of people living in South Africa. 2. Budget priorities for the medium-term