Cape Town: Finance Minister Pravin Gordhan’s Budget Speech has been met with positive feedback from his Cabinet colleagues.
Ministers have praised the minister’s “balancing act” considering the current tough economic times.
Minister Gordhan tabled his 2014 Budget Speech in Parliament on Wednesday, announcing several schemes to boost economic growth and employment. He said a 2.7 % growth was expected for the country’s economy this year.
Among the announcements, Minister Gordhan made was a R10 billion incentive programme for the manufacturing sector and a R15.2 billion allocation to business to upgrade machinery and increase productivity over the next three years.
“It was a very bold budget, a lot of balancing considering the tough situation we find ourselves in,” said Trade and Industry Minister Rob Davies.
Minister Davies welcomed the announcement in the budget that R3.6 billion will be injected into special economic zones to promote value-added exports and generate jobs in economically disadvantaged parts of the country.
“I think what has come out is that, despite some trying circumstances, we actually managed to steer this economy through. We managed to grow jobs and a number of productive sectors. The minister has emphasised that our programmes remain a priority in job creation, particularly the incentives for the manufacturing sector.”
Minister Davies conceded that programmes that support small businesses remained critical to South Africa’s economic growth.
“To achieve real structural changes in the economy and place it on a different growth path you need small business on board and it must be easy for them to conduct business and that is what this budget is speaking to,” added Minister Davies.
His sentiments were echoed by Labour Minister Mildred Oliphant, who was particularly pleased about the introduction of the youth employment scheme this year. Minister Gordhan had said in his speech that the scheme had in its first month recorded 56 000 beneficiaries.
“We believe youth employment is a major area that we should be investing in, because if young people in the country are not working, then the economy will be stagnant. We also welcome the initiatives to assist retrenched workers.
“The speech was very encouraging and we are looking forward to growth,” said Minister Oliphant.
She further welcomed the commitment to extend the Community Work Programme to every municipality in the country. Many have hailed the programme because government is able to absorb large numbers of unemployed youth while addressing service delivery at the time.
In his speech, Minister Gordhan announced increases in social grants and the expected growth in the number of beneficiaries in the next two years. From April, the old age grant will increase from R1270 a moth to R1350, while the foster care grant will increase to R830.
Social Development Minister Bathabile Dlamini agreed that social grants remained a critical tool to alleviate poverty in the country.
“[Minister Gordhan] was able to focus on social protection because he understands that social protection is about the constitutional rights of the poor. It is about ensuring that we improve the quality of life for the poor.
“What is more important is that the increases in social protection are above inflation rates and we must congratulate the minister for that,” said Dlamini.
Health Minister Aaron Motsoaledi applauded the R600 million investment into the introduction of the new Human Papilloma Virus (HPV) vaccine which prevents cancer of the cervix. The roll out of the vaccine will begin in schools across the country next month, for Grade 4 learners.
“We are happy that we in South Africa are also implementing this for the first time. It’s the first time that the country is using this vaccine for cancer because it’s a very expensive vaccine. So we fought very hard with the Minister of Finance to make sure it becomes available in our country.
“Many developing countries are not able to afford the vaccine so we regard it as a huge achievement to protect our young girls from developing cancer,” he said.
Business meanwhile welcomed the budget, saying it was balanced and adequately responded to the economic growth challenges. Speaking outside the National Assembly, Business Unity South Africa (BUSA) acting CEO Cassim Coovadia said business “should be pretty happy with the budget”.
“I think it is good that he emphasised time and again that we must implement the National Development Plan which, as business, we are very committed to working with government to implement'” he said.
Coovadia lauded Minister Gordhan for his announcements related to incentives for small and medium enterprises. “I think the promotion of small and medium business and some of the tax incentives related to that is very good.
“I also think that he has again sent out the message that … government needs to be wise about how it spends its money. The National Treasury oversight on major contracts – I think it is a very good idea,” he said.
Minister Gordhan had announced a budget allocation of R6.5 billion over three years to support small and medium enterprises.
Coovadia said Busa was happy that Minister Gordhan had placed a focus on creating an environment for the private sector to create jobs.
In his speech, the minister announced the Employment Incentive Scheme had created 560 000 jobs since it was signed into law in January.
He also said it was the responsibility of the private sector to create jobs, and that government would do its best to create an enabling environment to do business and create employment.
Dennis George, the General Secretary of the Federation of Unions South Africa (FEDUSA), said while the federation would wait to see how the Employment Tax Incentive would fare in the months to come, he welcomed the minister’s statement that the private sector was responsible for creating jobs.
“The recommendations of Judge Dennis Davis’ tax review committee that it must reduce the tax compliance burden for small business is something that is also quite important.
“Also quite critical is the issue regarding taxation. You want small businesses to break even, the owner of the business to also get a salary and for the business to flourish.”
He welcomed Minister Gordhan’s commitment that government departments will pay small businesses within 30 days.
“[This] supports their cash flow. If a company has to wait nine months for a government department that is lax, that don’t care for money, it can cause the business to go under and that is the important steps that the government has announced,” he said.
The ANC also welcomed the budget, saying all the announcements in the Budget Speech reflected the outcomes of the party’s planning meetings.
SOURCE: South African Official News