2021 National Budget Speech – an opportunity to return to best practice
22 February 2021
Agri SA is looking forward to the minister of finance, Tito Mboweni’s National Budget Speech on February 24.
The balance between government income (tax revenue) and expenditure is at the heart of the government budget, says KulaniSiweya, Agri SA head of economics. “Rating agencies and financial market role players will want to see a commitment to fiscal consolidation. The fiscus is under severe strain and a further downgrade from credit agencies must be avoided at all cost.”
This is an opportunity to return to best practice, using the right instruments to cut unnecessary expenses without fear or favour. “Whilst fiscal consolidation is crucial, any tax increases would have to consider the current economic environment and the potential negative impact that higher taxes could have on growth,” Kulani urges.
Agriculture has shown that it is a resilient sector that, with assistance from government, can build the economy and increase fiscal stability. From the National Development Plan (NDP) to the more recent Economic Reconstruction and Recovery Plan, there has been overwhelming recognition that the agricultural sector is a sector of growth and has potential to further create job opportunities for rural communities. The sector has remained profitable, despite all the challenges and this aspect should be safeguarded by sound policy framework and implementation thereof, but also leveraging from expertise of commercial farmers across the value chain.