Business Unity South Africa (BUSA) commends Finance Minister Pravin Gordhan, Deputy Minister 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 enabling meaningful and sustainable transformation.
“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 for inclusive growth in a transformed, economically vibrant society,” 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, health along with the implementation of the national minimum wage will, in line with the country’s development goals, help to combat inequality and provide the basis for sustainable, inclusive, economic growth. Any investment in skills development and education is an investment in our collective future,” stated BUSA CEO Tanya Cohen.
BUSA acknowledges the emphasis on employment in the Budget speech. 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. BUSA therefore embraces Treasury’s tax proposals, including maintaining Value Added Tax and Corporate Income Tax at current levels. While no tax increases are welcomed, BUSA recognises that they are necessary to balance the budget. In this regard, the implementation of a high tax bracket and increased tax rate is both progressive and responsible.
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 notes with approval the emphasis on power solutions such as IPPs that the country can afford.
BUSA CEO Tanya Cohen said: “We recognise the commitments made to improve governance and support cost containment of operations in SOEs.”
Creating a conducive environment for private investment through collaboration and inclusive growth
NHI and CSS are acknowledged as imperatives alongside complementing the commitment to education and health. BUSA supports the view that we need to create the fiscal space to fund the implementation of these programmes, recognising the critical contribution of business to the fiscus and addressing the challenges of poverty, inequality and unemployment. The country needs to enhance the investment environment so that the economy can grow and deliver to developmental objectives.
BUSA is particularly pleased about the decisive focus provided by the Budget in relation to inclusive economic growth. Commitment to address regulatory burden, particularly in relation to business registration, small businesses and doing business generally and in specific sectors is welcomed.
Business is committed to playing its part in Government’s transformation agenda and to acting, in partnership, to grow the size of 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 ensuring 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 to be welcomed.
“As BUSA we welcome the focus on inclusive growth and the underscoring of the imperative to accelerate economic empowerment efforts in our collective interests as a country. This will grow our economy, create jobs and enable us to deliver to our developmental objectives” stated Cohen
BUSA President Jabu Mabuza said: “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 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.