2021 Budget speech presented by Finance Minister Tito Mboweni in Cape Town Western Cape. Photo GCIS
2021 Budget speech presented by Finance Minister Tito Mboweni in Cape Town Western Cape. Photo GCIS

Mixed reviews for Budget as businesses and agriculture sector wonder who will pay

By Mwangi Githahu Time of article published Feb 26, 2021

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Cape Town - Western Cape businesses and agriculture are sceptical about the Budget, expressing concern about where the money to fund all the plans will come from while simultaneously praising it for no new tax hikes as farmers and those in tourism felt forsaken.

Cape Chamber of Commerce and Industry president Janine Myburgh said: “The Budget was as expected. No shocks and no evidence of backbone in tackling the SOE and other elephants in the room.”

“Those in the private sector wryly noticed that the reason for no new taxes was the tax contribution of the mining sector, ironically an industry that some departments of State seem to have been intent on closing. Some mining houses have already taken the hint and left. Those who stayed came to our rescue.”

“Good to know that Covid-19 vaccines will be available to all and that the private sector will pay for quite a bit of them through medical aid societies. However, whichever way you look at our national finances, we are still deeply mired in debt that is rising faster that the economy can pay it back,” said Myburgh.

Commercial farmers in the province have said they felt abandoned by the government.

CEO of Agri Western Cape Jannie Strydom said: “It is clear from the minister of finance's Budget speech that commercial agriculture can’t rely on much government support.”

“On the contrary, the burden on commercial producers has been increased with among others the announcement of an 8% increase in excise duty on alcohol and tobacco, a 27 cents per litre increase in the fuel levy and no drought assistance to the sector,” said Strydom.

Chief risk officer at SME service provider firm Lulalend Garth Rossiter said: “The R4bn allocated on the medium term to township and rural enterprises is good news. I would like to see how it will be allocated, but anything that grows businesses in these areas must be seen as a fantastic initiative.”

However, secretary-general of the Black Business Chamber (BBC) Kaya Cishe said: “We have taken note of the interventions by the minister to allocate R4 billion to SMME as a loan guarantee scheme.”

“However, we as BBC have no confidence that such monies will finally reach SMMEs. As the minister was delivering his Budget speech there is about R1.8 billion which is a significant portion of the R2 billion that was previously allocated for a similar purpose, that is still sitting in the banks. We can only hope that this is not just an administrative exercise while SMMEs are closing as a result of the Covid-19 pandemic,” said Cishe.

CEO of Cape Town Tourism Enver Duminy said: “The tourism industry has been decimated by the effects of Covid-19 and the lockdown regulations that have been put in place as a result of the pandemic.”

Senior area vice president for the Radisson Hotel Group Tim Cordon said: “We had hoped that the tourism industry as a whole would have received more attention in the Budget speech, especially given that this is a sector that contributed 8.7% to the country’s GDP pre-Covid-19.”

National president South African Informal Traders Alliance Rosheda Muller said: “As always the devil is in delivery, and therefore would like to be able to monitor the implementation of this Budget closely to ensure it reaches its intended recipients. As we always say, nothing about us, without us.”

CEO SweepSouth Aisha Pandor said: “The increase in the fuel levy may seem like an easy target, but it will profoundly impact South Africa’s poorest workers, many of whom have to travel long distances to work, who will be subject to likely heavy increases in public transport costs as a result.”

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