Skills development and debt reduction will be the top topics

ECONOMISTS and experts this week said they expected Finance Minister Pravin Gordhan’s budget speech on Wednesday to focus on skills development, debt reduction and a curb in government spending to address the moribund economy.

Janine Myburgh,the president of the Cape Chamber of Commerce and Industry, said a membership survey showed that businesses were deeply concerned about education and the need to develop the skills necessary to grow the economy.

“Without these skills, particularly in maths and sciences, it is very difficult to build a modern economy.”

Divert funds She said skilled professionals also needed the support of technicians and artisans and that it was time to divert funds accumulated in the Setas to the technical universities, colleges and other vocational training institutions. “We believe we will get better value if these funds are channelled to the existing technical and vocational training institutions.”

Myburgh added that chamber members also believed an increase in the VAT rate was justified. “Our 14 percent VAT rate is low by international standards and an increase in the rate would spread the tax burden more widely. It also makes sense to apply the taxes where the money is spent rather than where it is earned.”

Arthur Kamp, an investment economist at Sanlam Investments, said he expected some slippage in the key budget deficit and government debt ratio for 2016/17 over the medium term.

“The consolidated government spending ratio is excessive at 33 percent of gross domestic product (GDP), but the Treasury’s track record in containing expenditure has improved in recent years. Indeed,

Some slippage in the key budget deficit and government debt ratio is expected.

non-interest spending per capita has remained just about unchanged since fiscal year 2011/12 after adjusting for inflation. Considering these developments it is fair to argue some of the key building