While Minister Enoch Godongwana’s Medium Term Budget Policy Statement included some positive pronouncements, Agri SA is disappointed that the statement failed to provide for critical interventions to support South Africa’s hard-hit farmers.
Agri SA was encouraged by the commitment to increase infrastructure expenditure. We are hopeful that this expenditure will have positive multiplier effects and, if carried out timeously and effectively, will set the economy on a growth trajectory.
Agri SA is also cautiously optimistic about the planned expenditure on state-owned enterprises. To date, expenditure on these entities has not yielded good outcomes, and there remains a risk that relieving Eskom of a portion of its debt may encourage further maladministration. Nevertheless, given the magnitude of the current power crisis, Agri SA hopes to see Eskom use this opportunity to address its challenges and fix the country’s power supply.
Despite these positive steps, Agri SA is concerned by the Minister’s failure to provide any relief targeted at the agricultural sector. The sector, which is a key contributor to the South African economy and our guarantor of food security, has been hit hardest by rising input costs and farmers find themselves in dire financial circumstances. Yet Minister Godongwana did not announce any measures to help ensure the sustainability of the sector.
There was no tax relief for industries weighed down by excessive sin taxes, nor was there any pronouncement on critical policy concerns including the revision of assessed tax losses, proposed changes to the Financial Intelligence Centre Act, 2001(FICA), or the new rules around the diesel rebate scheme.
Agri SA will continue to engage government and National Treasury to ensure that we see a taxation and policy framework in the budget in February within which the agricultural sector can thrive, and that reflects the needs of this critical, job-creating sector.
