BUSINESS IS READY TO PLAY ITS PART
Business welcomes a Budget committed to inclusive growth and accelerated transformation
Business Unity South Africa (BUSA) commends Finance Minister Pravin Gordhan, Deputy Minister Mcebisi Jonas and National Treasury for delivering an exceptionally well crafted and progressive Budget for Government that balances key country challenges against the need for accelerated economic growth and employment; thus enabling meaningful and sustainable transformation.
BUSA President Jabu Mabuza says: “We welcome Minister Pravin Gordhan’s focus on a transformation budget that is premised on sustainable and inclusive growth for all South Africans. We are pleased that the Finance Minister sees Business as a key partner to unlock growth and grow small to medium enterprises to alleviate unemployment and inequity. We are fully behind “Team SA”, and will work hard to maintain our investment grade rating, and to sustain and service government borrowing. Business is ready to play its part in the transformation agenda and to work together with all other sectors of society to build a prosperous and inclusive South Africa.
“Business supports and welcomes Minister Gordhan’s budget and is committed to working alongside all stakeholders, including Government, Labour, and Civil Society to achieve our collective goals to grow our economy, create jobs and enable us to deliver to our developmental objectives,” says BUSA CEO Tanya Cohen.
Prioritising education, health in social spending and stimulating employment creation
BUSA supports the prioritisation of education and social spending as well as the reforms in public procurement, which it believes will generate improved efficiencies in state spending.
“Targeted interventions in education and healthcare together with the implementation of the national minimum wage are in line with the country’s development goals and will help to combat inequality and provide the basis for sustainable, inclusive, economic growth. Investment in skills development and education is an investment in our collective future,” says Cohen.
BUSA regards all effective interventions to stimulate employment as crucial, particularly those targeted at increasing the participation of youth, women and poor people in the economy.
Increased Tax Proposals
BUSA acknowledges the need for a progressive approach to raising the taxes that are needed to address inequality and transformation. In this regard, the implementation of a high tax bracket and increased tax rate is both progressive and responsible. BUSA embraces Treasury’s tax proposals, including maintaining Value Added Tax and Corporate Income Tax at current levels.
Fiscal Consolidation
BUSA supports the stabilisation of government’s wage bill and efficiency and cost containment efforts targeted at stabilising government debt at 48% of GDP over the next three years. Furthermore, Treasury is to be congratulated for maintaining the budget deficit for 2017/18 at 3.1% of GDP, in line with previously articulated fiscal consolidation commitments.
Cost containment in relation to SOEs in the Budget
Business welcomes the commitment by Government to reinforce governance and accountability and to clarify development mandates at SOEs to strengthen the economy. BUSA is supportive of the emphasis on power solutions such as IPPs that the country can afford.
“We recognise the commitments made to improve governance and support cost containment of operations in SOEs,” says Cohen.
Creating a conducive environment for private investment through collaboration and inclusive growth
National Health Insurance (NHI) and Comprehensive Social Security (CSS) programmes are acknowledged as key imperatives to support the commitment to education and health. BUSA supports the need to create the fiscal space to fund the implementation of these programmes, recognizing the critical contribution of business to the fiscus and addressing the challenges of poverty, inequality and unemployment.
BUSA is particularly pleased about the decisive focus provided by the Budget in relation to inclusive economic growth. The commitment to address regulatory burdens, particularly in relation to doing business for SME’s is welcomed.
Business is committed to playing its part in Government’s transformation agenda and play its role in growing the economy. This requires that we transform the economy through black economic empowerment and other measures which fully integrate all members of society in contributing to and benefiting from the economic potential of the country.
BUSA welcomes the call by government to increase private-sector participation in sectors dominated by public enterprises, and to ensure that effective regulatory authorities curb the power of monopolies. An environment that enables smaller enterprises across sectors to access the market and thrive is critical to inclusive growth.
The emphasis on collaboration, and active business engagement as a mechanism for building sustainable solutions is also welcomed.
Statement issued by BUSA, 23 February 2017
