The medium-term budget statement did little to inspire business confidence - Dr John Purchase, CEO of Agbiz.
The medium-term budget statement did little to inspire business confidence, said John Purchase, CEO of SA’s agricultural business chamber Agbiz.
Reacting to Finance Minister Malusi Gigaba’s speech on Wednesday, Purchase said Gigaba’s reference to the contested Regulation of Agricultural Land Holdings Bill as part of the government’s Inclusive Growth Action Plan did not allay fears arising from policy uncertainty in the farming sector.
Agribusinesses remain concerned the bill will not achieve the accelerated land redistribution and inclusive growth the country needs.
In his statement, Gigaba said only that stakeholders were being consulted about the bill.
The bill provides for the establishment of a land commission to be appointed by the rural development and land reform minister. This commission is to establish a register of public and private agricultural land ownership.
Agricultural landowners will be obliged to lodge a notification of ownership with the commission to include the race, gender and nationality of the owner and the size and use of the agricultural holding.
Government spending on agriculture, rural development and land reform will increase by 2%, from about R25.9bn in 2016-17, to R26.5bn in 2017-18.
Purchase said the statement came against the backdrop of low business confidence and low economic growth, while there were no substantial revenue measures envisaged and that the land bill would not achieve the accelerated land redistribution and inclusive growth the country needed.
Agribusiness confidence was relatively positive, however, following a robust summer crop harvest, said Purchase, but policy uncertainty was a key risk.
"We are pleased that Minister Gigaba acknowledged the efforts of the CEO Initiative in driving inclusive growth of the economy. Similar engagement should be encouraged at a sector level to address burning issues such as transformation, land reform and inclusive growth," he said. "Public-private partnerships can unlock additional resources to supplement government’s expenditure to address these issues."
Agricultural economist Fanie Brink was also critical of Gigaba’s statement.
"The government must ... acknowledge and accept that the producers, manufacturers, traders and service providers on the supply side, and consumers on the demand side, are in fact the largest and most important role players in the economy, as the creators of economic growth, prosperity and progress in any country in the world.
"The government should, therefore, drastically reduce its involvement and interference in the economy," said Brink.
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