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Towards hope, confidence,
and a better future for all
“ Crises are useful. They force principles in the National Development effective implementation thereof by
you to face reality and become Plan (NDP) and indicated that the Budget government departments and provincial
is guided by the NDP. He further and municipal authorities over the next
more creative in finding indicated that we cannot, as a principle, year or more. That, together with
spend money we don't have, and that the creating policy certainty, will need to
solutions. This national crisis budget deficit will be reduced to 2.4% by build trust and investor confidence that
2018/19 and that net national debt will be are the necessary precursors for
should not be wasted, and stabilised at 46.2% of GDP by 2017/18. significant investment into and growth of
the economy.”
through collaboration and Agbiz welcomes these targets as
servicing our debt has been the fastest Wessel Lemmer, Senior Agricultural
shared commitment, I'm growing expenditure item on our budget Economist at Absa
and needs to be brought down and
confident we can work through controlled better. Sin tax: “It should have a limited effect on
exports. It will have an impact on
our current challenges to find Agbiz also welcomes the announcement consumption and demand in South
that measures are in progress to Africa, especially for lower income
SA's enormous potential once strengthen agriculture and agro- consumers…”
processing, although these agriculture
”more. measures appear to be primarily directed Fuel tax: “There will be little impact on
at smallholder farmers only. primary agriculture e.g. maize and wheat
- Minister Pravin Gordhan - producers etc. … There will also be little
The minister made reference to the impact on commodities.
The 2016 Budget was widely mooted as drought and its impact on a number of The benefits of lower crude oil prices will
the most difficult budget in recent times. occasions, indicating that resources had not be felt by the consumer as a result of
Minister Gordhan produced a budget already been reallocated to provide relief the 30c increase in fuel levy.”
which attempts to address various in the current financial year, and that
divergent agendas. These include additional drought response allocations Food exports: “South Africa is a net
measures to alleviate poverty and will be made, as required, in the agricultural commodity and food
unemployment, address the imbalances Adjustments Appropriation later this year. exporter. If the rand stays strong, export
in education, social security, retirement It is unclear if any envisaged drought prices may be subdued marginally.
and health provision and improve relief and drought recovery funding will Overall the impact on staying above sub
infrastructure, while at the same time benefit the commercial sector in any way investment grade should have more of a
introducing measures to grow the at all,” Dr Purchase said. positive impact on the rand strength,
economy and to tighten South Africa's imported inflation as well as interest rate
fiscal belt to avoid a rating downgrade. Significant increases in capital gains tax, levels… This will culminate in lower
the introduction of a tax on sugar- inflation/food inflation.”
The funding of these agendas is sweetened beverages, above inflation
challenging in the economic increases in duties on alcoholic Minister Gordhan called on all South
environment that South Africa currently beverages and tobacco products, and an Africans to assist in meeting the financial
faces. Minister Gordhan indicated that increase of 30c per litre in the general challenges South Africa faces and aptly
R15 billion per year has been included as fuel levy, are generally not good news for ended his speech with the wise words of
budget revenue from tax proposals in the the agriculture and agribusiness sectors. Nelson Mandela : “I am fundamentally an
2017/2018 and 2018/2019 budgets. optimist … keeping one's head pointed
Options to raise this revenue include Key to the success of the indicated new toward the sun, one's feet moving
increasing marginal personal income tax direction in the 2016 Budget, will lie the forward …”
rates, introducing a new personal income
tax bracket, raising
Dr John Purchase, CEO of Agbiz.
“Gordhan emphasised several broad
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