NEWS
MIXED BAG OF EMOTIONS
TOWARDS 2021 BUDGET SPEECH
Finance Minister Tito Mboweni delivered his 2021 budget speech on 26 February 2021 . The speech was met with mixed reactions from stakeholders across all business and service sectors .
Kefiloe Manthata Senwes Journalist
There is much scepticism about
the budget , with rising concern about where the money to fund all the plans will come from , but there is also praise for the decision to avoid new tax hikes for now . Of all those affected by the budget speech , stakeholders in the agricultural sector may have felt that in a year where the agriculture industry carried the country ’ s economy through an intense lockdown period , not much attention was paid to the sector in the speech .
Agri SA executive director , Christo van der Rheede , reacting to the budget 2021 speech , said that the government was “ scraping the bottom of the proverbial fiscal barrel ” with gross loan debt amounting to R5,2 trillion in 2023 / 24 and an estimated tax deficit of R213 billion , which was sending the country fast on its way to a fiscal abyss .
According to a study conducted by the World Bank , the agricultural sector employs 65 % of the work force and contributes 32 % of GDP . Similarly , approximately 70 % of Africa ' s population depend directly on agriculture for their livelihood . However , the African agricultural industry is currently facing several problems with low productivity . This has been compounded by climate change , a lack of technical expertise and the migration of young people away from rural areas and into cities .
The tobacco farmers and the alcohol industries , the two industries hardest hit by the lockdown , received a further blow with the minister adding more to existing sin tax . Mboweni said that a 340ml can of beer or cider would cost an extra 14 cents , with a 750ml bottle of wine now costing an extra 26 cents , a 750ml bottle of sparkling wine will now be setting back customers an extra 86 cents , while a bottle of 750 ml spirits , including whisky , gin or vodka , has increased by R5.50 .
The good news , however , is that according to the budget speech , the SA economy is expected to rebound by 3,3 % this year , following a 7,2 % contraction in 2020 , and average 1,9 % in the outer two years .
32
SENWES SCENARIO | HERFS � AUTUMN 2021