Acts Online
GT Shield

Budget Speech, 2013

Growing the real economy

 

 

Mister speaker,

 

Growing the economy means expanding business activity. We recognise the key role that private companies play in our economy.

 

In the lead-up to the Budget, we engaged with several business leaders on the investment and development challenges we face. Allow me to share with you some of their plans, which signal growing confidence in the business outlook, despite difficult conditions.

 

• Construction and refurbishment by a company in the hospitality sector firm of R2.5 billion in the next 18 months and expansion of R3 billion in the pipeline
• Two telecommunications investments amounting to R14 billion this year
• Capital expenditure of R3.4 billion over the next three years by a rail and logistics operator
• A R2.5 billion expansion and longer-term plans of R15 billion in mining projects
• Investment of R1.4 billion this year by a leading retailer, and plans to open 100 new stores by another
• An expansion of R1.2 billion this year by a food and beverage sector firm
• Plans for R28.5 billion in long-term infrastructure investment by a leading industrial company, which will create 10 000 temporary and 4 000 permanent jobs.

 

In recent times, the world has become a more uncertain place for businesses, causing some to build cash reserves rather than invest in new or expanding operations. As government, we wish to encourage businesses to keep investing in our economy, and seize the opportunities around us. We are therefore reinforcing several initiatives that support business development:

 

• The Manufacturing Competitiveness Enhancement Programme (MCEP), announced in 2012, has received a total of 215 applications with requests for grants totalling R2.3 billion mainly from the chemicals, metals and agro-processing sectors. Applications are expected to increase over the period ahead and funding of R1.7 billion per year has been provided on the budget of the Department of Trade and Industry.
• The Special Economic Zone (SEZ) Programme, also announced last year, has received funding to build world class industrial parks. I am in discussion with Minister Davies on specific tax incentives to enhance this initiative.
• The Jobs Fund announced in the 2011 Budget has concluded two calls for proposals. In total, 3 614 applications have been received, and 65 projects approved. Grant funding of R3.3 billion has been approved, matched by a further R3.1 billion in funding raised by the private sector.
• Small, Medium and Micro Enterprises (SMMEs) play a key role in the development of the economy and are a significant generator of employment. Financing of SMMEs has been simplified with the creation of the Small Enterprise Finance Agency last year. We have been progressively working to simplify the tax requirements for small business. The turnover threshold will be increased this year and the graduated rate structure will be revised.