Supplementary Budget Speech – Key Takeaways
Infrastructure development, including public-private partnerships, a key component in the Supplementary Budget 2020
“Against the backdrop of ongoing measures to address the Covid-19 pandemic in South Africa, the Supplementary Budget 2020 highlighted several key aspects”, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“Apart from the health and safety aspects so crucial to reducing the impact of this humanitarian crisis, the prioritisation of infrastructure development, including bridges, roads, railways and ports, is positive news, with 177 infrastructure projects already being considered across public and private sectors. Tuesday’s Sustainable Infrastructure Symposium for SA announced that there were already 55 “shovel-ready” infrastructure projects in the pipeline.”
Golding adds: “This strategy, together with the re-energising of public-private partnerships, augurs well for increased confidence in our economy among investors – both local and international, and the business sector, with broad spin-offs for job creation, industry, communities and ultimately, the property market.”
Gerhard Kotze, MD of the RealNet estate agency group, says that from a real estate point of view, there were four main positives in the Supplementary Budget, all of them related to saving jobs and creating new employment. This is the biggest challenge the country faces in trying to repair the economic damage done by the COVID-19 pandemic, and obviously vital for both the rental and purchase sectors of the real estate market.
The first positive, says Kotze, was the news that the Loan Guarantee Scheme for small businesses is now up and running and has already advanced some R10m to help companies that lost money during the lockdown or that need help to restart. Every enterprise that can be saved also means jobs that are being preserved.
“The second positive is the R100bn allocation over the medium-term for specific programmes to promote new employment – which is critical with the unemployment rate having reached 30,1% at the end of March being set to increase even more over the next few months. These programmes include a revamped public employment programme and the presidential youth employment intervention. A total of R27,7bn has been found to support these initiatives in the current financial year.”
Thirdly, says Kotze, it is welcome news that government is determined now to shift public sector spending away from consumption and into investment – and specifically R100bn of investment in better infrastructure, including roads, railways, harbours and sustainable energy. Such projects are usually also major job creators.
Kotze concludes: “And finally we are encouraged by the decision to recapitalize the Land Bank. The R3bn involved is a relatively small expense for the fiscus, but will save many farmers from going under – and in the process ensure continued food security for SA while saving many thousands of agricultural jobs.”