Budget speech fails to deliver

Janine Myburgh, president of the Cape Chamber of Commerce and Industry.

This budget will not solve any of South Africa’s pressing economic problems or bring us closer to solutions.

The chamber’s impression is that it is a holding or “treading water” budget designed to keep us afloat until after the election.

We have urgent problems like dealing with Eskom and the other state-owned entities which are on the verge of bankruptcy. Drastic measures are required, but if we expected them in the budget, we have every reason to be disappointed.

The minister did not shy away from the seriousness of our problems and warned that we would have to deal with bitter fruit, but he offered us little. We will have to wait until after the election.

Predictions of an economic growth rate of 1.5% are optimistic and, weighed against an increase in the debt-to-GDP rate, it is clear that we are slipping backwards.

It was clear from the minister’s remarks that he knows what kind of decisions will have to be made in the near future, but the question is whether there will be the political will to make those decisions. At present, the indications are that there is such a diversity of opinions in the ruling alliance that those decisions will be difficult, to say the least.

In spite of this, we are making progress, especially with the clean-out of SARS and measures to make it easier to do business and invest in new projects. Clearly the minister is counting on the private sector to produce the growth that will begin to turn the economic tide, but we need more help in reducing over regulation and even interference in the private sector.