Download Budget Speech 2014 here
The Nelson Mandela Bay Business Chamber received the Minister Pravin Gordhan’s 2014 Budget speech positively. The Chamber believes that the Minister has shown a strong and steady hand in handling the finances of our nation through a tumultuous time, and for this, he must be commended.
The Business Chamber’s chief wish for Budget 2014 was for the judicious allocation of funds towards the building and maintenance of the country’s critical infrastructure.
We therefore welcome public infrastructure investment to the amount of R847 billion over the next three years, with the Medupi power station coming online, Transnet’s additional rail capacity, and spending on social infrastructure, particularly in the areas of health and education.
"...the Minister has shown a strong and steady hand in handling the finances of our nation through a tumultuous time..."
We are pleased to note the R40 billion in infrastructure grants to local government for water, sanitation, energy and environmental functions, and look forward to seeing how the Nelson Mandela Bay Metro can access and benefit from this particular grant.
We appreciate the immense focus on renewable energy projects that are currently under construction, to increase power generation capacity in South Africa, with more investment in the pipeline.
We are encouraged, too, by the focus on long term city planning to encourage private investment in urban development, amounting to R814 million over the medium term.
"We welcome public infrastructure investment to the amount of R847 billion over the next three years..."
We welcome the numerous initiatives towards economic growth, such as:
• the Manufacturing Development Initiative, which allocates R10.3 billion over the next three years;
• The Economic Competitiveness and Support Programme, which will provide R15.2 billion to business to upgrade machinery and increase productivity;
• the Special Economic Zones, being allocation R3.6 billion to promote exports and generate jobs.
The focus on small business and entrepreneurship is welcomed. We welcome the R6.6 billion to support small business, as well as the easing of compliance burden on small business and the restructuring of the tax regimes.
We are heartened, once again, by the commitment to the payment of SMEs within thirty days. However, this must be enforced at a provincial and local level.
We note the expected growth rate of 2.7%, but believe that this is still insufficient. We will have to work hard to get to the levels required to encourage and sustain growth into the future. We agree that this is going to require dynamism and agility in the government, the private sector and labour.
It is important to note that government is pursuing the exploration of shale gas as additional energy source for our economy. This will require the participation of business in this new energy source and economy in our region.
We are grateful for the delay of Carbon Tax to allow business to have a greater understanding of its role, responsibilities and compliance with these regulations.
"We are heartened, once again, by the commitment to the payment of SMEs within thirty days. However, this must be enforced at a provincial and local level."
It is important that government is pursuing specific steps to make it easier to do business in the country.
We support the streamlining of regulatory and licensing approvals in the area of Environmental Impact Assessments, and also further steps to lower the cost of tax compliance.
It is reassuring to note that government is committed to providing policy certainty to investors, with a holistic framework for investment flowing from the National Development Plan. This places investment at the centre of the economic growth plan.
With this in place, and a number of incentives proposed, we hope to encourage future foreign and domestic investment.
Regarding the fiscal framework and long term sustainability, we welcome the emphasis on moderate public expenditure and the lowering of the budget deficit, as well as on government’s adoption of a balanced fiscal stance.
The emphasis on ensuring that expenditure is allocated efficiently, enhancing management, cutting waste and eliminating corruption is sincerely appreciated.
"It is reassuring to note that government is committed to providing policy certainty to investors..."
We are well aware of the cost containment instructions issued in January 2014, and will go a long way to ensuring that expenditure remains below the ceiling required in the next three years. We trust that the same cost containment measures will be adhered to at a local and municipal level.
We support the notion of government procurement supporting local industry additional black economic empowerment, but this requires dedicated champions within the provincial departments to foster such economic empowerment as we would like to see through the Buy Eastern Cape campaign.