Fuel-inflation fears but hope for farms in KZN

FINANCE Minister Malusi Gigaba’s Budget has been widely welcomed even though it contained harsh aspects such as the increase in VAT. Durban Chamber of Commerce and Industry president Musa Makhunga said the Budget sought to address the socio-economic challenges our economy faced at local and global levels.

“The Durban chamber recognises that, in addressing the deficit in revenue and stabilising debt, some tough decisions had to be made.

“The 52c/litre increase in the fuel levy – 22c for the general fuel levy and 30c for the Road Accident Fund – will put pressure on the KZN economy given its reliance on the logistics sector.

“The pass-through effect will result in price inflation on goods across the country. The KZN gross domestic product model is based on our fuel consumption and this will put pressure on growth,” said Makhunga.

He said the VAT rate increase from 14% to 15% would raise

DURBAN CHAMBER SAYS BUDGET IS TACKLING CHALLENGES,WRITES

GIVEN MAJOLA

revenue for the fiscus, but it would also lift the cost of living for all households.

“The chamber applauds the minister for his work on developing robust turnaround plans for our state-owned enterprises. This is in line with the strong position taken in the State of the Nation address by President Cyril Ramaphosa.

“There is an urgent need to reform the governance of stateowned entities, which represent critical state infrastructure and cannot be left to operate in disarray. They need to create added value for the nation and not be a drain on its finances.”

Makhunga said that with all the recent financial mismanagement, impropriety and fraud exposed in the private sector, the direct action promised in the fight against corruption in both public and private sectors was welcome.

University of Kwazulu-natal’s school of accounting, economics and finance expert Ayanda Meyiwa said a highlight was that the Budget speech did not deviate from the State of the Nation address.

“References to the president’s speech were a sign of unity, which the country really needs now. With regard to what would be done about the poor performance of state-owned entities, the sentiments were echoed that the board of directors needed to be chosen carefully.”

Meyiwa said the Budget speech, however, indicated a shift in ideology. “What we saw during the reign of Jacob Zuma was the old party line of developmental state rhetoric. In the State of the Nation address, there was nothing about that and in the Budget even less – except for things that could be expected such as defending the livelihoods of the poor, which was commendable despite the VAT increases. The above-inflation increase in social grants will also provide much relief for the poor.”

“Agriculture was primarily responsible for getting the country out of recession and more is to be done to ensure it grows. But it was not mentioned in the same sentence as mining. In KZN, we are strong on farming and not much was said about how this would grow, but perhaps that’s to be expected since this was a national, not a provincial, Budget. KZN needs to focus on growth through agro-processing – the downstream beneficiation of agricultural products.”

Economic Development,

Tourism and Environmental

Affairs spokesman Bongani Tembe welcomed the Budget: “It was a balanced budget that will help our economy grow. We are particularly pleased that of the incentives budget, R4.9 billion has been allocated to industrial infrastructure for special economic zones or government-owned projects to promote industrial development.