Against that background, Agbiz supports the new initiatives and focus areas that are to be financed from savings, efficiency gains and reprioritisation. The government's intention to spend more on infrastructure, as opposed to public sector consumption, as a reprioritisation strategy, is constructive.
Agbiz welcomes the focus on the improvement of economic competitiveness, investment in infrastructure and increased productivity. It is constructive to base the fiscal policy within the framework provided by the National Development Plan. Agbiz welcomes the renewed focus on the basics, such as the focus on effective basic education and infrastructure spend, as these have been neglected for too long and are essential to improve economic competitiveness.
While the private sector's contribution to large investments projects was recognised and the Minister was at pains to portray a positive investment environment for business, questions remain as to how the cost of doing business can be reduced to improve competitiveness. The cost of using national infrastructure will remain high as long as the financing thereof is increasingly based on a user-pay basis and other cost drivers, through the fuel levy and proposed carbon taxes, increase the cost of doing business.
Furthermore, modest personal tax relief will enhance the agricultural sector as a whole, as consumers are in need of some relief. Agbiz is very supportive of tax relief to small businesses in the attempt to broadly support entrepreneurs. The tax incentives for employment generation and the incentives for doing business in Africa are also greatly welcomed.
Specifically in the agricultural context, Agbiz supports the intentions to support the biofuels drive and emphasises the need to re-address the biofuels policy in agriculture. Agbiz also welcomes the announcement by Minister Gordhan of the allocation to the enhancement of manufacturing competitiveness (specifically for agro-industrialisation) and for the special economic zones. Agbiz is, however, concerned as to how the Department of Agriculture, Forestry and Fisheries (DAFF) will spend the provided additional allocation for smallholder farmers, as their support to date has not brought forth the much-needed successes. Greater efficiency in that spending is required. Agbiz was disappointed that no mention was made of a budget allocation to speed up, and possibly conclude, land reform and land restitution - especially considering the recent emphasis that was placed on this issue through the consultation process on the Green Paper on Land Reform.
While all the detail has not been analysed, Agbiz overall welcomes the minister's budget speech. Despite having little room in which to manoeuvre, he has addressed the key issues correctly, focused on value for money and inspired confidence that the country's finances are being managed responsibly.
