Budget Speech 2010: SACCI comments

In responding to the Budget Speech delivered by Minister Gordhan, a South African Chamber of Commerce and Industry spokesperson said:

We welcome

• The thrust of the budget that shows discipline, has stimulative elements and presents a longer term economic vision for South Africa.
• The appreciation that while South Africa was not as severely affected by the global downturn, its recovery is not robust, and hence the recognition that the Minister has given to the plight of the distressed sectors through government’s new Industrial Policy Action Plan.
• A tolerance for a deficit, although details on financing were not provided.
• Initiatives to encourage the employment of the young and inexperienced persons. While there may be an initial cost to government, increased employment will lead to later gains from income tax and will make a contribution to poverty alleviation.
• Additional allocations for education and skills development. In addition to the provision of equipment and books, SACCI would encourage the use of some of the funds for the improvement of teaching skills and for the reopening of teacher training colleges. SACCI believes that it will be necessary for government to consult the private sector in determining the skills needed to be imparted to the youth in order to facilitate gainful employment.
• Health and improved management of HIV and TB and the introduction of public-private-partnerships in the health sector. However, SACCI is disappointed that the Minister did not place greater emphasis on improving management and conditions in hospitals and the skills levels of care givers. 
• Infrastructure spending. SACCI is disappointed that the jobs created by the public infrastructure projects will be of a temporary nature. SACCI believes that some of the spend should be allocated to the establishment of small businesses that can undertake maintenance of the new infrastructure. This will increase the potential for more permanent employment of a decent nature.  
• The emphasis that was placed on improving efficiencies and the reduction in wastage in service delivery.
• The clarity given regarding the independence of the Reserve Bank, the management of exchange rate fluctuations and inflation targeting and the continued gradual relaxation of exchange control regulations which remove uncertainty that has recently prevailed in the business community.
• Rural Development, although no details were provided. The provision of income earning opportunities to areas where people live has the potential to stem the migration of worker seekers from rural to urban areas, thus reducing the need for local authorities to provide housing and services and thereby alleviating pressure on urban infrastructure.
• Relief for households that will support consumer spending.

We would like to have seen more of

• Detail regarding support for the business environment particularly the cutting of red tape for SMEs.
• Attention to crime and corruption. The focus on public sector tendering processes seems too narrow. There is a need to address the broader facets including the rooting out of bribery and corruption not related to tendering and improved efficiencies in the judicial system. 
• The vigorous implementation of the Local Government Turnaround Strategy.

What we are concerned about:

• An increase in the fuel tax of 25,5c/l and the implementation of a flat emissions tax that will have a negative impact on the cost of transport and consequently on inflation.

What we would have liked but did not get:

• Funding for the provision of essential services by state owned enterprises, such as support for Eskom in its electricity generation build programme and for the establishment of the Independent Systems Operator that President Zuma referred to in his State of the Nation Address last week.

SACCI Media Release | 17 February 2010