The 2016 Medium-Term Budget Policy Statement (MTBPS), which was tabled by Finance Minister Pravin Gordhan on Wednesday, indicates that various government incentive programmes are being reviewed.
“Given increased pressures on the fiscus, these incentives, including direct transfers, tax and tariff rebates and concessional financing are being reviewed. The review is intended to assess performance, determine value for money and analyse how the system as a whole supports the economy and job creation,” the Minister said.
He highlighted that the range of direct support government provided for business development across the country through its various incentive programmes was vast, and that many of these incentives were helping certain sectors contribute to the economy and employment.
The MTBPS points out, for example, that about R28-billion worth of projects have been approved under the Manufacturing Competitiveness Enhancement Programme (MCEP), supporting an estimated 200 000 jobs.
Trade and Industry Minister Dr Rob Davies last month announced the partial reopening of the programme, which had been suspended since October 2015, owing to insufficient funds.
The R1-billion loan component is in the process of being reopened, while the Department of Trade and Industry continues discussions with the National Treasury on additional support for the manufacturing sector.
The multibillion-rand MCEP scheme comprises a grant facility and a loan facility, with the latter administered by the Industrial Development Corporation.
Meanwhile, Gordhan noted that the Clothing and Textiles Competitiveness Programme had helped to stabilise the sector, while the Automotive Production and Development Programme had contributed to increased vehicle exports.
The review is expected to be completed by October 2017.