Sacci wants mini budget to clarify issues

2012-10-23 13:42 - Sapa
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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.

 

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