3 interlocking crises Budget 2018 must address – BLSA

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Sizwe Mbhele of BLSA (Supplied)

Cape Town – Business Leadership SA (BLSA) has always said there are three interlocking crises that Budget 2018 must address, according to Sizwe Mbhele, director of strategy of BLSA.

These are the crises of the fiscal deficit, state capture and the loss of confidence in the country.  

In Mbhele’s view Budget 2018 was merely lukewarm.

He was not surprised about the hike in value-added tax (VAT) as the minister did not have many other options.

As for performance by public sector executives and wage increases, Mbhele would have liked if if Gigaba stated that those executives who do not perform in accordance with their mandate, will be fired; that no bonuses will be paid and that public wage increases will not be more than inflation.

BLSA hopes to engage with the new ANC leadership to present its plan for SA’s economic recovery.

“We believe business can provide not only words, but the capacity. Some of our highly skilled members are on the Eskom board, for instance,” said Mbhele.

“We have a score card to keep track and report to our members and to government. We want the government and a social partner like labour to come to the party.”

LISTEN: Mbhele talks to Moeshfieka Botha about Budget 2018:

Broadly, Budget 2018 makes desperate attempts to balance trade-offs, amid competing priorities, according to Mbhele.

“As a person, he (Gigaba) was acutely aware that the eyes of rating agencies and investors were firmly zoomed on him, while the consumers were staring at the entire administration,” he explained.

In Mbhele’s view, there were no surprises in Budget 2018, given the limited options that National Treasury faced.

“This economy needs inclusive growth and jobs. Of course, there are no jobs and retrenchments are everywhere,” he said.

“We should learn from Winston Churchill, who said ‘I contend that a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up the by the handle’.”

He also pointed out that in 2017/18 the net borrowing requirement – the amount needed to finance the budget deficit – will total R217.3bn, which is R50.5bn higher than projected on Budget 2017.

“How does one allow an access ‘overrun’ when the situation calls for reduction? It should not be allowed. Any additional commitment of public resources to poorly-managed state-owned companies should be accompanied by clear reformation of competent, competent, governance (board and executives), cut of wastage and free of corruption and state capture,” said Mbhele.

“It is time to apply strictest sagacity so that the pain felt by the consumers is not absorbed by all. It is high time for clear and full accountability. It cannot be business as usual.”

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