The Durban Chamber of Commerce and Industry is concerned about the country’s debt burden and the 27 cents per litre fuel hike which will severely impact the logistics reliant KwaZulu-Natal economy.
Durban Chamber of Commerce and Industry president, Nigel Ward said in the chamber’s statement reacting to Finance Minister Tito Mboweni’s budget speech that was an urgent need for economic reforms to ensure the country’s economic recovery.
He said the Durban business chamber welcomed the minister’s remarks regarding altering the structure of this economy by lowering barriers to entry, raising productivity, and lowering the cost of doing business.
However, he said the chamber was concerned about the 27 cents per litre fuel levy hike and the country’s burgeoning debt.
He said government policies and decisions needed to be in the best interest of the business community and more deliberate to encourage and empower inclusive and sustainable economic growth and development.
He said the chamber was “deeply concerned” about the debt outlook.
“We believe there is an urgent need for government to limit its borrowing and reduce debt levels. The Durban Chamber urges government to proactively reduce unnecessary expenditure,” he said.
He said the decrease in corporate income tax to 27 per cent for companies with effect from April 1, 2022 would provide relief to businesses and promote economic growth.
However, he said the chamber was concerned about the 27 cent increase in fuel levy as this the hike would place “excessive pressure” on the KZN economy, which is extremely reliant on the logistics sector.
“The KwaZulu-Natal GDP Model is tied to our fuel consumption, and this will surely put downward pressure on the GDP growth of the province, from a fuel consumption perspective, as well as price inflation of goods and services across the country,” he said.
He added that the chamber was deeply concerned about the proposed increase in excise duties on alcohol and tobacco products.
“The COVID-19 pandemic has impacted the liquor and tobacco industry negatively. Prolonged periods of sale bans have translated to huge losses. An increase will simply threaten the sustainability of this industry,” Ward said.
He added that the chamber supported Mboweni’s commitment to combatting corruption.
“ There have been numerous scandals which have exposed the high levels of corruption within South Africa and have negatively impacted our country’s image as well as our tourism and investment profile, both locally and internationally. Not only has this had a negative impact in terms of foreign investor confidence but it has severely impacted citizens’ trust in government and its dealings,” he said.
He said the government and business needed to devise a strategy to reposition the country’s investment profile as a preferred investment and tourism destination.
“This will stimulate investment, which will encourage sustainable and inclusive economic growth as well as opportunity and job creation. The government needs to introduce tried and tested private sector performance management models within the public sector,” he said.
He called for remedial action and “punitive consequences” for corrupt officials.
“So far, despite the abundance of evidence and the brave actions of whistle-blowers, numerous corrupt officials continue to hold office and to receive government salaries while awaiting state action that never comes. No-one has been charged, tried and compelled to face the consequences of corruption,” he said.
“The only time we will see real change is when severe consequences are actioned against perpetrators involved in state capture and corruption.”