Busa’s got beef with the bud­get

CityPress - - Business - DEWALD VAN RENSBURG busi­ness@city­press.co.za

Busi­ness Unity SA (Busa) told Fi­nance Min­is­ter Pravin Gord­han that his an­nounce­ment around the planned car­bon bud­get sys­tem in the Bud­get Re­view was “prob­lem­atic”.

The busi­ness body also has con­cerns that “cred­i­ble cost-ben­e­fit analy­ses” are needed on the planned Na­tional Health In­sur­ance scheme, so­cial se­cu­rity re­form and the nu­clear build pro­gramme.

At a feed­back ses­sion at the Na­tional Eco­nomic De­vel­op­ment and Labour Coun­cil (Ned­lac) af­ter the bud­get speech, Gord­han and his of­fi­cials got into a war of words with the Black Busi­ness Coun­cil (BBC), the other or­gan­i­sa­tion that was rep­re­sent­ing busi­ness at Ned­lac.

At the same meet­ing, Busa gave a pre­sen­ta­tion, which City Press has seen.

Busa agrees with only one item on the BBC’s list of com­plaints about the bud­get: the new higher div­i­dends tax.

“Af­ter ac­count­ing for cor­po­rate in­come tax [paid be­fore the dis­tri­bu­tion of div­i­dends], the com­bined statu­tory tax rate on div­i­dends is now more highly taxed than the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment’s av­er­age equiv­a­lent mea­sure, which may have un­for­tu­nate ram­i­fi­ca­tions in lim­it­ing in­vest­ment ap­petite,” said Busa in the pre­sen­ta­tion.

The BBC also ex­pressed con­cern about the higher div­i­dend tax be­cause it would af­fect a ma­jor chan­nel through which BEE deals are fi­nanced.

Busa did, how­ever, have a hand­ful of sep­a­rate crit­i­cisms.

Trea­sury is get­ting ready to put a re­vised Car­bon Tax Bill be­fore Par­lia­ment in “the mid­dle of 2017”, but will only fi­nalise a pol­icy on how the car­bon tax will align with car­bon bud­gets at the end of the year.

Busa said it “notes with con­cern ... that gov­ern­ment only ex­pects to pro­vide clar­ity at the end of this year on the align­ment of the car­bon tax and car­bon bud­get af­ter 2020”.

“This is prob­lem­atic as we are cur­rently com­ment­ing on a doc­u­ment from gov­ern­ment on the na­tional mit­i­ga­tion sys­tem, which in­cludes align­ment be­tween the car­bon tax and the car­bon bud­get sys­tem,” said Busa.

Busa CEO Tanya Co­hen said the or­gan­i­sa­tion wanted cer­tainty that there wasn’t any “pol­icy mis­align­ment” on the ma­jor pend­ing tax and an­cil­lary mech­a­nisms.

A car­bon bud­get is an emis­sions tar­get that de­ter­mines the rate at which com­pa­nies and the coun­try as a whole must re­duce emis­sions.

The ear­lier car­bon tax pol­icy gives com­pa­nies co­op­er­at­ing with the planned na­tional car­bon bud­get sys­tem an al­lowance they can sub­tract from their car­bon tax.

Busa also fret­ted about the costs of ma­jor planned im­prove­ments to the South African so­cial safety net.

“We con­tinue to ad­vise cau­tion in gov­ern­ment’s pol­icy an­nounce­ments with sig­nif­i­cant fu­ture ex­pen­di­ture com­mit­ments, such as the Na­tional Health In­sur­ance scheme, com­pre­hen­sive so­cial se­cu­rity and the nu­clear build pro­gramme.

“Cred­i­ble cost-ben­e­fit analy­ses must be un­der­taken as a part of any con­sid­er­a­tion of fis­cal com­mit­ments now and in the fu­ture.”

Trea­sury spokesper­son Yolisa Tyantsi wasn’t able to re­spond to City Press’ re­quest for com­ment on Fri­day re­gard­ing Trea­sury’s re­sponse to Busa’s crit­i­cisms.

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