Budget shows confidence in SA: SACCI

By Drum Digital
23 February 2012

The Budget shows South Africa can expand its economy unlike many developed countries facing economic crises, the SA Chamber of Commerce and Industry (Sacci) said on Thursday.

"The Budget speech was a confident signal that South Africa is ready to expand its economy," Sacci CEO Neren Rau said in a statement.

"This is in sharp contrast to the fiscal woes of most developed nations and Sacci welcomes the pragmatic approach towards management of the South African public finances."

Finance Minister Pravin Gordhan tabled his 2012/13 Budget in the National Assembly on Wednesday.

Sacci liked various commitments in the Budget, including the emphasis on the need for a business-government partnership to grow the economy and the details on financing the various infrastructure investment programmes.

However, it said the 20 percent increase in the fuel levy would drastically affect the cost of doing business, especially in light of the already high fuel price outlook.

"This will have a particularly negative impact on the small and medium enterprises which are already facing severe sustainability challenges."

Rau said Sacci was pleased about the progress made by the National Treasury in addressing provincial fiscal mismanagement and the plans to address government under-spending and misspending.

However, it would have liked Gordhan to give timelines on how long the provincial interventions would take before restoring fiscal sustainability.

Sacci welcomed the tax support and cutting of regulatory hurdles for micro enterprises.

"Sacci appreciates the intent and would like to see this expanded to the broader SME [small and medium enterprises] sector," Rau said.

The tax breaks announced for individual savings products to support household savings were also a good move.

"This would increase the pool of investment funds in South Africa."

The chamber was concerned that Gordhan did not present a strategy for funding the National Health Insurance scheme.

"Sacci looks forward to seeing details in the policy document that will be published in April," Rau said.

He said Sacci would also have liked information on how the public wage bill would be cut to sustainable levels.

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