Minister of Finance Tito Mboweni leads his team to the National Assembly where he delivered the Mid Term Budget. Photo: Phando Jikelo/African News Agency (ANA)

JOHANNESBURG – Agricultural industry association Agri SA on Wednesday congratulated Finance Minister, Tito Mboweni, on his first Medium-Term Budget Policy Statement (MTBPS) and said it contained several promising policy indicators.

"The successes cited in rebuilding investor confidence is certainly important, but the central policy issue at present is expropriation without compensation (EWC) of agricultural property, which will more than extinguish all other gains made," Agri SA head of corporate affairs and communication, Pietman Roos said.

"Building confidence in the farming sector is in fact the biggest priority at present."

Mboweni presented his maiden MTBPS in Parliament on Wednesday.

Roos said they welcomed the R3.4 billion allocated to drought relief, the majority going towards upgrading water infrastructure. 

He said the severity of the drought conditions does however require direct assistance to farmers and rural communities to ensure that farms are able to remain active and to avoid job losses.

"Singling out of agriculture as an important driver of economic recovery is heartening, so too the reprioritisation of support to the Land Bank," said Roos.

"The R27.4 billion shortfall in tax revenue is of great concern and speaks to the urgency of addressing governance issues at SARS. The commitment to avoid increases in major tax instruments is also welcome. It would be fair if increases in excise taxes are set below inflation, given the already high rates charged and recent history of above-inflation increases." 

Roos said the commitment to reconfigure spending on state owned enterprises (SOEs) was clearly necessary, but the honest assessment was that similar statements have been made in the past with no sign of real progress. The key deliverable on this point was to reverse the tradition of debt commitments and cash-flow bail-outs worth billions of Rands.

The recognition of the role played by the ballooning wage bill in escalating government spending, and in turn debt levels, was appropriate, as well as the instruction to government departments to absorb salary increases rather than stretch the wage bill further.

"This item is admittedly the biggest fiscal challenge and will require several years to manage downward, if at all. Agri SA is cautiously optimistic about several of the policy commitments and will engage with the Minister to ensure there is follow-through," said Roos.

African News Agency (ANA)