Budget 2023 overview
for the world.” “The budget seemed to be well considered, with good intentions. It is positive in that there was some modest tax relief for individuals and some assistance for those who are investing to generate their own power. However, there will be limited implementation of the other policy objectives … as simply allocating money to broken municipalities, government departments and SOEs [state-owned enterprises] will continue to achieve nothing. Beyond a few public-private partnerships there was insufficient recognition of the critical role that the private sector must play in managing state assets if the economy is to be saved and then turned around.”
Charles Pettit, CEO of Apex Partners
“The announcements by the finance minister regarding incentives to the private sector to install renewable energy facilities is most welcome. The 125% tax allowance on construction costs for renewable facilities should make a significant contribution to the alleviation of load-shedding over the next two years.”
Mike Teke, CEO of SeritiResources “I can’t decide if the budget is positive, negative or neutral. The rand seems to think slightly positive … The Eskom bailout is arguably too small and the growth assumptions are slightly optimistic. Perhaps the most important aspect is that the fiscal consolidation stance and acceptance of not increasing taxes remains intact … The budget also confirmed that our tax collections are good, so no big changes are needed to tax rates.”
Peter Armitage, CEO of Anchor Capital “The budget was delivered very positively by the minister of finance, trying to do a difficult balancing act. The incentives for individuals and businesses to install solar systems are welcome … though they could have been higher for individuals. The issuing of a guarantee of R350bn to Eskom is very significant …
Overall a positive budget during a difficult fiscal period
Mustaq Brey, CEO of Brimstone “What is worrying me is the prediction of GDP rates going forward, and growth. I think it is going to be much lower. They are basing a budget on GDP growth that is too high, so the deficit is going to be higher. What that means is the debt-to-GDP ratio can potentially be higher than 73.6%.”
Jannie du Rand, CEO of Remgro “The Eskom debt relief is significant, and should allow the utility to run properly without asking for 18% increases while providing less electricity.
That’s the problem with load-shedding … Eskom needs to charge more to cover the loss of revenue from load-shedding and so businesses get a double whammy. I’m not sure how the new Eskom CEO will feel about being told by the National Treasury how to run the utility in return for the debt relief.”
Stephen van Coller, CEO of EOH