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Business, industry welcomes mid-term budget

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Finance Minister Nhlanhla Nene’s maiden Mid-term Budget Policy Statement in Parliament has been widely welcomed by business and industry. Nene delivered his speech in October.

He announced major reductions in government spending over the next three years and stressed the importance of exploring partial privatisation of some state entities.
The South African Chamber of Commerce and Industry has welcomed Nene’s mini budget statement.

The chamber’s CEO Neren Rau says they are pleased that government has embarked on a major reduction in its spending over the next three years.

Rau says the chamber is also pleased with the attention that the Minister has given to service delivery, infrastructure development, health and education.

“Very important points that the Minister has touched on in keeping with our expectations, the first is the downward revision of the growth rate, 1.4% is in line with the broader expectations of the economy and spectators abroad.”

He adds: “The Minister has indicated that he has to raise R 15 billion in revenue. We have slight concerns as a chamber as to how this R15 billion will be raised.

We have indicated repeatedly that there is no capacity within business to contribute to a greater extent that it is already contributing, further households are also under pressure and also cannot contribute to tax revenue on a broader basis.”

The Chamber of Mines of South Africa welcomed the budget. “The Chamber notes the Minister’s acknowledgement of the impact of the weak global economic environment as a key contributor to the lower than expected growth in the country’s economy as set out in the 2014 budget in February,” it said in a statement.

The organisation continued to work with government through the Mining Framework Agreement Process on measures to deal with the short and medium term constraints to the growth of the mining sector, it said.

Failure to act against those who do not implement these much-needed cost-saving measures can only undermine minister Nene and his team

“We acknowledge the Minister’s call for a new accord between the industry tripartite partners. The issues he raises are subjects that have and continue to grip the focus of the chamber and senior leadership of all our member companies.”

The chamber said it was working on initiatives to help unlock investment and growth, and enhance the contribution of the mining sector to the country’s transformation.
Meanwhile, Government’s undertaking to contain costs and reduce total expenditure by R6 billion in the current financial year was welcomed by the Steel and Engineering Industries Federation of SA (Seifsa).

“Minister (Nhlanhla) Nene and his team had to engage in a delicate balancing act,” says Kaizer Nyatsumba, CEO of Seifsa.

“It now remains to be seen if the financial discipline, efficiency and responsibility correctly identified by the Minister will be evident throughout all tiers of government, with all instances of corruption ruthlessly dealt with,” he says.

“Failure to act against those who do not implement these much-needed cost-saving measures can only undermine Minister Nene and his team.”

The answer to generating the additional R15 billion required in the next financial year lay in making South Africa more business friendly, attracting new domestic and international investment, and not by increasing corporate and personal taxes, Nyatsumba says. – Additional reporting Sapa.

Nene’s budget widely welcomed

– By Amina Accram

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