The South African business community has welcomed the Medium-Term Budget Policy Statement (MTBPS) delivered by Finance Minister Pravin Gordhan to Parliament on Wednesday.
“The South African Chamber of Commerce and industry (SACCI) welcomes the announcement of the MTBPS delivered by the Honourable Minister of Finance, Mr. Pravin Gordhan,” the SACCI said in a statement here Thursday.
In his maiden MTBPS since returning to the National Treasury portfolio, Gordhan said the Treasury had revised the country’s 2016 growth down from the 0.9 per cent projected in the February national Budget to 0.5 per cent.
The SACCI said it was concerned at the revised growth target for 2016 but that the 0.7 per cent growth predicted for the 2017 fiscal year is encouraging, albeit low.
The MTBPS said investment in infrastructure remains a policy priority with public-sector infrastructure investment plans totalling 987.4 billion Rand (One US dollar = about 13.85 Rand) over the medium term, of which 334 billion Rand is in transport and logistics, and 137 billion Rand in water and sanitation. Investment in energy infrastructure totals 243 billion Rand over the period.
“The Minister’s announcement of R900 billion plus in proposed infrastructure expenditure should ignite significant economic activity to drive job creation and establish the necessary infrastructure platforms in energy, logistics and telecoms. These investments are key in consolidation and improving South Africa’s global competitiveness as an investment destination,” said the SACCI.
The SACCI said it was hopeful that stakeholders would react positively to the Minister’s announcement of additional funds that will go towards higher education. “We hope that these measures will be received positively by the key stakeholders, especially the affected students,” it said.
The Chamber encouraged Gordhan to continue with austerity measures to bring in line the non-investment related expenditure, including wasteful government spending.
“We however caution the Minister from adopting austerity measures which may appear good on the face of it, yet have a negative impact on the SMME (small, medium and micro enterprises) sector which relies mainly on supplying goods and services to government departments and related entities. This could have a devastating effect on job creation and can cause job losses especially amongst the low skilled workforce.”
Meanwhile, Public Service and Administration Minister Ngoako Ramatlhodi lauded the MTBPS, saying it was a mini budget given under difficult circumstances.
“It is a statement given under very difficult conditions. We are restrained but I think we are alive to the challenges that face government and within that context we are trying our best to meet our basic obligations to the nation and to the country,” said Ramatlhodi who contributed to the building of the statement.
On whether the MTBPS will help South Africa avert a credit rating downgrade in December, the Minister told SA News that the country had done what it could to avert a downgrade. “We’ve done what we could to avert a downgrade on our part but we hope it is good enough,” he said.
Health Minister Aaron Motsoaledi heaped praise on the Minister of Finance given the lack of economic growth. “I really heap praise on the Minister of Finance and his team. This was a very difficult job. To balance it like that, [in conditions] of lack of growth, meaning that the revenue has not expanded .. But still to protect social services like education, health and social development and still try to include resources for inclusive growth, it was a difficult task. Under the circumstances they’ve really done their best,” said Motsoaledi.
Source: NAM NEWS NETWORK.