Business Unity South Africa (BUSA) welcomes Minister of Finance Pravin Gordhan’s Budget Speech delivered on Wednesday 27 February.
BUSA sees the budget as well balanced given the current economic conditions and broadly aligned to the aspirations of the recent State of the Nation Address and Medium Term Budget Policy Statement. This reflected consistency and continuity and BUSA is pleased that the Minister reinforced the National Development Plan as a significant point of departure for future policy.
BUSA is therefore pleased that the Minister touched on key elements of the NDP and that the State aims to strengthen its capacity to implement. This is where Public Private Partnerships (PPPs) become critical and we would like to re-emphasise business’ willingness and commitment to assist. The theme of closer co-operation between the public and private sectors reflected in the budget speech is welcomed.
Business is encouraged by the investment spending infrastructure programmes amounting to R827 billion over the next three years, which can have big job creation spinoffs. However, further details are necessary to ensure speedy implementation of these programmes. More detail is also needed on the proposed youth employment incentive scheme, which business finds positive for potential job creation.
Business also views the Minister’s “no-tax increase” sentiment as key to stimulating domestic demand. However, it is clear that unless growth and employment are enhanced, fiscal sustainability could be jeopardised. We are also comfortable with further tax relief for small businesses, including an increase in the monetary tax thresholds applicable for small business corporations. Although financing agencies have been established, financing remains a constant constraint on small business development.
In conclusion, BUSA agrees that prudent fiscal and monetary policies remain a prerequisite for SA’s successful economic performance. Hence the NDP needs to be implemented within a framework of fiscal responsibility embodying appropriate spending priorities. Increasing government investment spending rather than consumption spending is a step in the right direction to help strengthen the country’s balance sheet.
This is an unedited statement issued by BUSA