Cape Town – Government has allocated billions of rands towards programmes that will support businesses, competitiveness and skills and development.
Tabling his Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, which is also dubbed the mini budget, Finance Minister Nhlanhla Nene said government would allocate R37 billion over the next three years to public employment programmes.
“This will allow the Expanded Pubic Works Programme (EPWP) to create about six million short-term jobs,” he said.
The Minister said this not long after Deputy President Cyril Ramaphosa, in his capacity as the leader of government business, told members of Parliament (MPs) during a question and answer session in the National Assembly that EPWP projects had alleviated poverty in areas where it was implemented.
In December 2014, the Deputy President told MPs that the EPWP programme had enabled the poor and unemployed to gain skills and increase their capacity to earn and income.
Minister Nene said on Wednesday that the programme would be expanded.
“By 2017, the Community Work Programme will exist in every municipality,” he said.
Subsidising targeted economic sectors
Minister Nene said a funding of R16.2 billion has been allocated to support industrialisation through incentives, promotion of various industries, and assistance to small enterprises and cooperatives.
Government also forgoes revenue of about R24 billion each year to provide tax incentives to businesses, he said.
“These initiatives include the Manufacturing Competitiveness Enhancement Programme and the Automotive Production and Development Programme. Special Economic Zones will receive continued funding, including new zones in the Free State and in Gauteng,” he said.
Review to assess impact of business incentives
The Minister said government was looking at assessing whether business incentives had any impact on growth.
This year, more than R7 billion will be transferred directly from the fiscus to support the operations of South African companies, which also receive about R24 billion in tax incentives annually.
“A review is proposed to assess the impact of fiscal incentives on economic growth, productivity, competitiveness, the balance of trade and employment,” the Minister said.
In its Medium Term Budget Policy Statement document, the National Treasury said, meanwhile, that a number of additional proposals that would increase incentives to the private sector have also been raised for consideration.
Treasury also said that the first phase of the Economic Competitiveness Support Programme, which was introduced in 2011/12, concludes in 2017/18.
“Over the six-year period, total allocations to this programme amount to R22.7 billion. The programme supports training, equipment and technological upgrades to improve competitiveness, and research and development.
“Government intends to renew the programme following a review of all business incentives. The review, which will be conducted during 2016, will assess the impact of incentives on economic growth, productivity, competitiveness, the balance of trade and employment.”
Particular focus will be given to job creation and the need to incentivise labour-intensive economic activities. The outcomes of the review will inform the allocation of resources for business incentives in 2018/19 and beyond. – SAnews.gov.za
