Finance Minister Pravin Gordhan. Picture: Sapa ~ SAPA
Cape Town - The SA Chamber of Commerce and Industry (Sacci)
has urged Finance Minister Pravin Gordhan to provide details on a number of
issues when he presents his latest medium-term budget policy statement to
Parliament on Thursday.
Sacci expected Gordhan to provide details on, among others,
how government plans to fund the R4 trillion infrastructure development
spending and possible principles for private sector involvement, Sacci chief
executive Neren Rau said on Tuesday.
On Small and Medium Enterprise (SME) support, he said there
had been repeated official commitments towards improving the business
environment for SMEs, but no concrete details had been provided in this regard.
"Sacci expects that the minister will provide
information on improved measures to enforce the 30-day payment directive and
other initiatives aimed at reducing the cost of doing business," he said.
It was inevitable that South Africa's economic growth
outlook would weaken due to the recent production stoppages brought about by
widespread industrial action and illegal strikes.
Despite official statements confirming South Africa's
economic stability, international investors often looked for cold, hard facts,
such as the size of the fiscal deficit to GDP.
Sacci expected clarity on the medium-term fiscal outlook and
further details on planned spending cuts to fruitless items that did not
improve South Africa's competitiveness.
Sacci also expected to hear of government initiatives to
mitigate the further lowering of state-owned enterprises' credit ratings to
below investment grade.
Rau said government should resist the pressure to increase
taxes as a means to manage the fiscal deficit.
The capacity of business to support further taxes was
constrained and it would impact on productive investments.
One fundamental question was how the national health
insurance (NHI) would be funded, with an additional income tax to individuals
being one possibility.
Sacci expected Gordhan to explain the funding options and
the immediate and broader economic impact of imposing additional taxes on South
African citizens, despite there being little fiscal space available to
introduce the NHI.
On youth unemployment, Rau said the opposition from labour
unions to the youth wage subsidy scheme could be negotiated to find a solution
workable for all social partners.
However, the National Treasury and the economic development
department still had to provide a foundation for such a negotiation.
"Sacci expects that the minister will provide clarity
on government's plan toward implementing a youth support programme."
Finally, Sacci supported a further shift away from
consumption spending towards investment expenditure, Rau said.