Johannesburg – The SA Chamber of Commerce and Industry (Sacci) was “underwhelmed” by Finance Minister Pravin Gordhan’s mini budget.
“The message from the minister had few details on planned changes to fiscal policies, and where details were given it was on peripheral matters like austerity measures for senior government officials,” Sacci CEO Neren Rau said in a statement on Wednesday.
However, he said Gordhan could be commended for his emphasis on pragmatic economic policy and priorities, on the National Development Plan and investment, and on the fact that a growing economy was critical to government activities.
Sacci welcomed comments about the country’s credit rating and government debt, and the commitment to reduce the fiscal deficit.
“Much work still needs to be done to present South Africa as an investor-friendly destination,” Rau said.
“Fundamentally, the fiscal deficit can only decrease if government spending is cut in a big way, which implies that the commitment to financial stability and sustainable fiscal policy must be reflected throughout the mini budget.”
Sacci appreciated the specific measures in the mini budget aimed at curbing wasteful expenditure by senior government officials.
It hoped this austerity trend would extend beyond office policies and be reflected in fiscal policy as a whole, said Rau.
He said Sacci would have liked to have heard more about carbon tax, the public sector wage bill, employment tax incentives, and the small and medium enterprises tax regime.
“Sacci is hopeful that the general message of the mini budget on productive investment, saving and securing a flourishing economy will manifest in tangible policies in the short to medium term.
“However, the current business and general economic conditions are harsh and the business community requires clarity on how government will improve its own value proposition beyond merely curbing the expenses of senior officials,” said Rau.
He said Sacci remained concerned that the mini budget was insufficiently reassuring to investors and ratings agencies