The world is changing fast and to keep up you need local knowledge with global context.
Alec Hogg spent time in lock with National Treasury and Finance Minister Pravin Gordhan this morning. Below are the key messages from Gordhan’s 2016 Budget address.
- “We are resilient, we are committed, we are resourceful.”
- The economic imperative is to ignite inclusive growth.
- Taxes are being raised moderately, across a broad base, with a limit on the impact on lower-income families.
- Government spending is being curtailed and cost containment measures reinforced.
- Where spending is growing, it is focused on post-school education and training, economic infrastructure, social protection and health services.
- The base of this Budget is following the NDP which calls for a social compact where communication flows freely and all economic roleplayers work in partnerships.
- Confidence will be restored through united action of all South Africans
What does government do well?
Tax administration. And paying social grants.
What should Government stop doing?
Corruption and waste. Bailing out state entities.
How can Government achieve inclusive growth?
Support for small business. Job opportunities targeting the youth.
QUOTABLE – Pravin Gordhan’s perspectives on…..
“All too often, bureaucrats and business people speak past each other……Race, class and language differences interfere with progress, even when we have shared aspirations. We need to bridge these divides.“
The platform from which the Budget was drafted:
“The Budget tabled today is guided by the NDP. It is a budget for inclusive growth, it emphasises partnerships amongst role players in our economy, it prioritises education and infrastructure investment, it supports employment creation and it contributes to building a capable, developmental state. “
Global role models:
“It is notable that faster economic growth is being achieved in countries which have undertaken bold structural reforms, such as India’s scaling back of subsidies for industry and opening up of trade opportunities, and the promotion of skilled immigration, urban investment and labour-intensive manufacturing and agro-processing in South-east Asian and several African economies. “
“We cannot spend money we do not have. We cannot borrow beyond our ability to repay. Until we can ignite growth and generate more revenue, we have to be tough on ourselves.”
The social safety net:
“Our policy commitment is to achieve universal health coverage, and comprehensive social security.”
“We do not need to be invested in four airline businesses. Minister Brown and I have agreed to explore the possible merger of SAA and SA Express, under a strengthened board, with a view to engaging with a potential minority equity partner, and to create a bigger and more operationally efficient airline.”
“Our aim is to strengthen our state entities so that they can play a propulsive and dynamic role in our development. Further financial support to state-owned companies will depend on clarity of this mandate and firm resolution of governance challenges.”
SOEs and Public Private Partnerships:
“The strength of our major state-owned companies does not lie in protecting their dominant monopoly positions, but in their capacity to partner with business investors, industry, mining companies, property and logistics developers, both domestically and across global supply chains.“
2016 Budget Highlights Card:
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