With Finance Minister Pravin Gordhan preparing to deliver his 2017 National Budget speech on Wednesday, the South African Chamber of Commerce and Industry (Sacci) weighed in on its expectations at a time when South Africa is experiencing subdued economic growth.
Amid the Reserve Bank having revised its forecast for South Africa’s economic growth to 1.1% for 2017, down from a previous outlook of 1.2%, Sacci on Tuesday said it would like to see this year’s Budget speech address the decline of employment in the mining and construction industries and how growing sectors can be assisted to create more jobs.
The slight 0.6 percentage point improvement in the country's unemployment rate to 26.5% in the fourth quarter was driven mainly by the services industries, transport and manufacturing. All other industries also reported quarter-on-quarter employment growth; however, mining and construction contracted.
“Sacci would like to see a more effective allocation of resources, be they human or capital, in speeding up the implementation of infrastructure projects, especially in the areas of energy, logistics and telecommunications,” the chamber noted.
Of particular interest to it is how the Budget will address allocations for small, medium-sized and microenterprise development and how President Jacob Zuma’s promises of “radical economic transformation” will be interpreted by the team at National Treasury.
Further, Sacci was hopeful of zero increases in corporate and personal income tax, as it believed this would be regressive, serving only to increase costs and discourage expansion through capital investment in productive capacity.
“This inevitably will lead to a rise in inflation as corporates will increase prices to ameliorate the additional tax burden,” it said in a statement.