Chairperson’s Welcome
Vuyiswa Ramokgopa
Dear Members, Stakeholders, Practitioners, and Industry Affiliates,
As we rapidly approach the end of 2023, plenty of important financial decisions are taking place, notably the MTBPS (Medium Term Budget Policy Statement) towards the end of October and the announcement of the MPCs repo rate decision in November.
In other news, the industry is gearing up for REIS 2023 (Real Estate Industry Summit) hosted by Private Property on the 17th of November (read about it on page 4) and, the PPRA has announced the revival of their Multi-Stakeholder Group meetings. The first one is scheduled for the 24th of January, get the full details on page 3.
The MTBPS
“Notwithstanding the stellar job that SARS has been doing to rebuild the institution and therefore increase efficiency in revenue collections, we believe National Treasury will report a negative hit to revenues in the coming MTBPS,” says Sisamkele Kobus from Ninety One in an interview with BusinessTech
.According to Kobus, revenue slippage for this fiscal year is expected to be R50 billion, far below the group’s initial fear of a R100 billion slippage earlier this year. This is because tax – except company income tax, which is running 115% lower than last year – has been performing relatively well, with personal income tax running at an 8% growth rate year-to-date. The economy has also performed better than expected, as stage 6 loadshedding at the start of the year created serious concerns.
“Given the intensity of load shedding, however, which was expected to persist throughout winter, it has been much more resilient,” Kobus said.
That said, spending is still expected to be far higher than the pencilled R2.035 trillion, as the treasury’s initial prediction of only a 1.6% wage hike ballooned to a 7.5% increase following wage negotiations in April.
Spending pressure also goes beyond the wage ball, as the nation’s State-Owned Enterprises remain a severe drain on finances. There is currentlyR30 billion in the budget for SOES – excluding the amount committed to Eskom – but it is becoming clear that they may need additional funding.
The Social Relief and Distress Grant introduced during the Covid-19pandemic is also budgeted to end this fiscal year.
Finance Minister Enoch Godongwana is thus stuck between a rock and a hard place, as he has to present a plan to address both revenue declines and increased spending.
