WE welcome the difficult balancing act Finance Minister Pravin Gordhan managed during today’s Budget Speech.
We agree with Gordhan that the 1.3% growth rate expected for this year is much too low to turn around the economy and unemployment rate in the country, in particular in the Eastern Cape, said Nelson Mandela Bay Business Chamber CEO Kevin Hustler.
"While the Nelson Mandela Bay Business Chamber acknowledges the need for economic transformation, we agree with Gordhan that this transformation must be focused on growing more jobs and diversifying the economy to build real livelihoods. His call to build the widest possible partnership to promote growth is welcomed by the business community, as we agree that an 'energetic coalition' between labour, business and government is imperative for progress and growth," Hustler said.
Experts from KPMG's Tax Department and The Nelson Mandela Bay Business Chamber CEO, Kevin Hustler, listened to the 2017 Budget Speech in the boardroom at KPMG Building, Greenacres.
The taxes Gordhan announced today to raise an additional R28-billion were more or less expected, given the current financial situation we find ourselves in. We are pleased that VAT was kept at the standard rate of 14%. Of concern, however, is the fuel taxes increase of 39c/litre and how this will affect ordinary businesses and the embattled consumer.
We call on government for further consultation, in particular with the industries affected, on the proposed Sugar Tax, as well as the Revised Carbon Tax.
While the tax payer will again foot the bill this year, we commend Gordhan’s emphasis on greater austerity measures by government institutions and his call for ethical business dealings where “public money must be used for its intended purpose”.
We agree with Gordhan that State Owned Entities, in particular Eskom and Transnet, have large responsibilities and that good governance and accountability should guide these entities.
We welcome his commitment to spend not only money on new infrastructure, but for government to maintain existing infrastructure. This would be particularly welcome with regards to not only the maintenance of roads but also electricity and water infrastructure, on a municipal level.
We welcome his commitment to continuing the independent power producer programme, both in renewables and to take advantage of gas investment opportunities – particularly what this could mean for the Eastern Cape as the hub of the country’s energy mix.
Sector specific items we wish to receive the lion’s share of in the Eastern Cape:
• R3.9 billion for small, medium and micro enterprises and cooperatives;
• R4.2 billion for industrial infrastructure in special economic zones and industrial parks;
• An additional R494 million for tourism promotion;
• An additional R266 million to support the aquaculture sector and realise the goals of the Oceans Economy Operation Phakisa;
• Spending on agriculture, rural development and land reform amounting to nearly R30-billion by 2019/20.
- Nelson Mandela Bay Business Chamber member companies Mazars and KPMG share all you need to know about the 2017/18 Budget here.