SACCI COMMENTS ON BUDGET SPEECH - PRESS RELEASE PDF Print E-mail
Wednesday, 24 February 2016 16:56

SACCI COMMENTS: BUDGET 2016


QUOTE:
In his budget speech, delivered this afternoon, the Minister of Finance, Hon Pravin Gordhan illustrated an understanding of the constraints facing the economy and the impediments that have to be overcome in order to grow the economy, create jobs, address inequality and reduce poverty.

SACCI welcomes the plans announced by the Minister in plans announced which aim to have a country that has an inclusive social compact that encompasses an equitable tax burden and a progressive programme of expenditure.

SACCI notes the focus on collaboration with stakeholders, and the need for partnerships specifically, with business.

 

SACCI is encouraged by the emphasis that the Minister placed on inclusive growth, the plan for a strong mixed economy, improvements in education and investment in infrastructure and acceptance for partnerships between government, business, organised labour and civil society as pre-requisites for policy coherence and more rapid development. Moves to reduce the regulatory burden on business and a reduction in the administrative costs of starting a business are reassuring.
SACCI is pleased to note that the budget deficit will be reduced to 2,4% by 2018/19; expenditure ceiling will be cut by R25 billion over the next three years and that an additional R16 billion is allocated to higher education, albeit from reprioritisation of expenditure plans. The rationalisation of state owned enterprises is welcomed.

SACCI notes that government is responding to appeals from business for greater certainty in policies that affect investment decisions, and this is welcome.

On tax proposals, SACCI acknowledges the constraints faced by Treasury, and congratulates the Minister for not increasing VAT, for limiting the personal income tax increases, and for providing relief of R5,5 billion to mainly low and middle income earners.

The Minister was silent on an increase in corporate tax levels which will be an encouragement to local and foreign investors. The increase of 30 cents a litre in the general fuel levy will impact negatively on transport costs, and is likely to be seen as an inflationary increase in the price of goods and services. This will be felt most acutely by the poor as food prices are likely to increase as a result. The level of tax that will be imposed on sugar-sweetened beverages and its impact remains to be evaluated.
SACCI is encouraged by the proposals in the budget and the focus placed on partnerships with business to move South Africa to a higher level of economic growth.
UNQUOTE

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