Budget Speech 2018Seizing the Opportunity for Inclusive Growth and Economic Transformation |
By harnessing these opportunities, we can move our economy towards the targets we have set ourselves in the NDP.
South Africa needs to be bold and coordinated in building sectors where we have comparative advantage and can be truly world class.
These include, but are not limited to: mining, agriculture, tourism, as well as manufacturing and service exports to the rest of Africa and globally.
The 2017 GDP growth projection has been revised upward to 1 per cent, which is higher than the 0.7 per cent expected at the time of MTBPS last year.
We are anticipating growth of 1.5 per cent in 2018, rising to 2.1 per cent in 2020.
While this is a good start, there are immediate policy interventions that we need to make to ensure that we create the right environment for investment, growth and employment.
The first is to finalize the 14 confidence-boosting measures that we committed to in July last year.
Madam Speaker,
I am pleased to announce that good progress has been made in this regard, as detailed in Chapter 1 of the Budget Review.
The gains from progress made by government action are important but insufficient to achieve transformation and inclusive growth.
Together, government, labour, the private sector and civil society have the ability and responsibility to grow the economy inclusively.
The enormous potential of our partnership has been demonstrated by the CEO initiative, which has established a business-led fund committing about R1.4 billion to support high potential SMMEs.
National Treasury invited citizens to contribute suggestions through our Budget Tips competition.
Our runner up tipster, Karabo Tladi reminded us that:
“Government must ensure that youth are equipped with sufficient skills in business and look critically at the policies that involves funding for youth owned business. If the funding for small businesses could be accessible unemployment will be cut in half through small business initiatives.”
Indeed Karabo, government must create an enabling environment for small businesses to thrive, as they are an important lever to create jobs and grow the economy inclusively.
Work is being done to provide crucial funding to innovative small businesses when they need it most.
A fund with an allocation of R2.1 billion over the medium term is being developed between the Departments of Small Businesses, Science and Technology and the National Treasury to benefit small and medium enterprises during the early start-up phase – this is an area that has historically had limited support because of the risks involved.
By enabling new businesses with new ideas to emerge and thrive, we are radically transforming patterns of production in the economy.
Another important constraint for small business is lack of market access and barriers to entry.
To resolve this, our competition authorities continue to do the necessary and important work of addressing barriers to entry and rooting out anti-competitive behaviour which slows economic growth and dynamism.
As the President indicated, the Competition Commission’s market inquiry to investigate data prices will be completed by the end of August 2018.
This will support the work being done by the government to improve competition in the telecommunications sector.
By deconcentrating our economy, we are radically transforming the structure of our economy.
Furthermore, there is continued collaboration with our social partners at NEDLAC to improve the country’s investment ratings and accelerate economic growth.
While this represents much needed progress, it is inadequate to get the economy growing at the rate we need.
More needs to be done.
We are inspired by the President’s commitment in the SONA to convene investment and jobs summits, to bring all stakeholders together around practical initiatives to catalyse inclusive growth and job creation.
Transformation calls for more than growth alone, it requires a fundamental shift in the way that wealth is created and shared.
The structure of the economy needs to be transformed to allow for new ideas, businesses and economic activities to emerge and thrive.
Madam Speaker,
South Africa cannot be so fixated on our domestic circumstances that we ignore fundamental global economic trends, dynamics and debates that will shape the future.
We must continue to chart a path for ourselves that is responsive to global change but equally tailored to addressing the specific needs of our society that will result in truly better lives for all.