The Black Management Forum (BMF) applauds the Finance Ministry and the Treasury team for an overall reassuring budget speech delivered under very challenging political and economic circumstances. We do however believe that the Finance Minister could have used the opportunity to give more meaning to radical economic transformation and how it could be achieved.
Our view has always been that as a country we should be preoccupied with addressing the triple challenges of our lifetime that are poverty, inequality and joblessness. Therefore, any budget allocation that is not designed to give meaningful radical economic transformation to address both class and racial inequality and does not stimulate employment opportunities and inclusive economic growth would have fallen short of delivering on our expectation. There are few areas that give us comfort in this budget speech; one is the commitment to restructure public sector procurement through the Public Procurement Bill to be tabled in the near future. Secondly, the realisation that economic growth and indeed transformation is constrained by the current oligopolistic market structure and thus
proposing structural reforms geared towards de-concentration of the market structure. “The reason it’s easier for banks and construction companies to collude and the reason its difficult for black new entrants to gain decent market share is because of the cartels and this oligopolistic market structure that is racially skewed. Sustainable transformation will never take place until we have dealt with this albatross in the neck of our economy”, said Dumisani Mpafa, BMF Deputy President. We would have wanted the Minister to go beyond just talking about “what transformation must do” and give substance to radical transformation by allocating resources for the development of township and rural economies, allocating more grant funding for Black business development support, allocating more funding for the Department of Small Business Development and the recapitalisation of the National Empowerment Fund. On taxation we would have preferred the introduction of a wealth tax and not an increase on income tax. We take comfort on the fact that the proposed tax increase impacts the upper middle to high-income earners. “It’s about time our government considered introducing the wealth tax as a mechanism to drive transformation and the BMF will be making a submission to the Davies Tax Commission in this regard” said Mpafa. We also would have preferred that the Minister propose stimulus packages designed to get the economy out of this low growth trajectory.
Black Management Forum
Head of Marketing & Communications