Take the private sector seriously. That was the message to the government yesterday from Nomaxabiso Majokweni, the chief executive of Business Unity SA (Busa), at a briefing ahead of the State of the Nation address this week.
She said the address should recognise that business was a capable and willing partner in addressing capacity shortfalls in all spheres of government, but especially at the level of local government, the agent of service delivery. “The private sector is a key partner for growth and the address should emphasise the role the sector can play in areas such as public-private sector partnerships and infrastructure provision.”
Commenting on the upcoming Budget, Busa special policy adviser Raymond Parsons urged the government not to spring any unpleasant surprises. He noted a reference to possible tax increases in Finance Minister Pravin Gordhan’s medium-term budget policy statement in October last year. He argued that any tax increases should not have a negative impact on investment, growth and employment.
“Put up taxes and there will be no economic recovery.”
Majokweni spoke of the need for fiscal policy to be sustainable and flagged potential dangers to sustainability.
“While Busa hopes to see tangible results emerging from the government’s infrastructure programme this year, it remains concerned as to how the proposed R3 trillion infrastructural plan is to be financed without excessive burdens being placed on the economy and business.”
Administered prices such as electricity were “already having a seriously negative effect on the cost of doing business”.
She called for a co-ordinated approach to decision making on administered prices to keep infrastructure financing “on a sound and affordable basis”.
Both speakers highlighted the pivotal role of Planning Minister Trevor Manuel’s National Development Plan (NDP), which was endorsed by President Jacob Zuma at the ANC conference in Mangaung.
Majokweni described the NDP as “a rallying call that can unite the whole country behind it. Busa sees it as essential that the State of the Nation address and the Budget reinforce the commitment to the NDP and its implementation in the period ahead.”
She warned: “The NDP can only work if the private sector can create jobs quickly enough.” This would only happen in an environment “in which small and emerging businesses find it profitable to expand boldly and create several hundred thousand jobs a year”.
Majokweni said allocations in the coming Budget should reflect the recommendations in the NDP, focusing on priority areas identified by the plan.
Busa forecasts economic growth of only 2.5 percent this year and 3.4 percent next year. And it predicts a rise in banks’ prime interest rates this year to 9 percent from 8.5 percent.