Agri SA is disappointed with the Medium-term Budget Policy Statement (MTBPS) that was delivered by the Minister of Finance, Tito Mboweni in Parliament today.
“Whilst the MTBPS does not include detailed spending plans or tax proposals, the Minister could have given more recognition to the role of the agricultural sector and the sector’s resilience in the face of many challenges, for example, the impact of longer-term droughts,” says Dr Requier Wait, Agri SA Head of Economics and Trade Centre of Excellence.
The MTBPS gave a report back and set out the context and assumptions that inform next year’s budget. Highlights from the MTPBS include:
- National debt is increasing at an unsustainable pace: expenditure continues to exceed revenue.
- Economic growth is now forecast at 0.5 percent in 2019 compared to the 1.5 percent expected in February. Accordingly, revenue projections have been sharply reduced.
- The consolidated budget deficit averages 6.2 percent of GDP over the next three years, whilst debt and debt-service costs will continue to increase.
- The growth outlook is too low, growth must be accelerated. The structural reform agenda and Treasury’s economic policy paper seeks to address this.
- Mounting debt and debt service costs are a concern: additional counter measures will be announced in the 2020 National Budget.
- Emphasis on addressing the challenge of the government wage bill.
- Support to state-owned companies (SoCs) comes with strict requirements and an emphasis on improving governance and performance.
- A focus to prioritise infrastructure investment.
Agri SA says it will continue its lobbying efforts, for government to place a bigger emphasis on agriculture and make adequate resources available to boost agriculture’s competitiveness and support the sector, especially in the drought affected areas. “This will allow the sector to continue producing quality food for the country and contribute towards job creation and poverty alleviation as envisaged by chapter six of the National Development Plan (NDP).”