Within the constraints of the local and broader global economy, TBCSA agrees with the broad view of the business community that the Finance Minister did not have much room to maneuver but nonetheless delivered an overall balanced budget. However, a major positive seems to be the message of travel and tourism as a key economic driver that is filtering through Government speeches and plans.

We are pleased to note the allocation of an additional R494m for tourism promotion that will be in addition to the 2016/17 budget allocation to the National Tourism Department of just over R2 billion. The Finance Minister also referred to local initiatives in the tourism and hospitality industry being key to economic progress. Additional highlights for business – from a travel and tourism perspective include:

  • National Treasury’s decision to leave corporate taxes unchanged: whilst we are mindful of the ongoing debate about the need for corporate South Africa to demonstrate its commitment to the country’s economy by reinvesting their earnings, this measure will go a long way in helping struggling businesses to keep their doors open – thus helping the economy to grow and creating the much-needed jobs;
  • The Minister’s pronouncement on plans to strengthen financial management capacity in municipalities: this is as an important focus area, considering that travel and tourism activity takes place in the localities of cities, townships and rural areas. We believe the success of this initiative will benefit residents and business at large;
  • Proposed reforms to state-owned enterprises (SOEs): We commend Government for the efforts made thus far to strengthen strategic leadership and the financial viability to struggling SOEs – with a particular focus on South African Airways (SAA) which has critical role to play in the growth of travel and tourism as a national airline carrier. Leadership and financial challenges within SAA have been ongoing for a long time and we hope efforts to turnaround the national airline will yield positive results.
  • Middle income earners will be relieved to see no tax increase, whereas high income earners (above R1.5m per annum) will be taxed 45% of their earnings. We expect to see even high income earners spending less on their travels and travelling less;
  • An increase of 30c/litre in the general fuel levy and 9c/litre in the road accident fund levy will have an impact on households but also on SMMEs that rely on transport and delivery of its products. We trust that this impact is countered with the promise of developing small businesses; 
  • The hospitality and restaurant industries are set to take a knock as the increase of 6-10% in excise duties for alcohol and tobacco will take effect
  • On economic infrastructure and development, government has prioritized both national and provincial infrastructure requirements by allocating R10.8 billion to The Provincial Roads Maintenance Grant; R15.4bn to SANRAL for the maintenance of the national road network, and R16.7bn allocated to the Passenger Rail Network Agency of South Africa. Also, R6.2bn is allocated for the development and operation of public transport networks through the Public Transport Network Grant;
  • We welcome the call for synergy with private sector, labour and government as emphasised with several initiatives under the auspices of BUSA currently and set to take effect. These include a fund to support SMMES (R1,8bn readily available); a youth employment service programme (aim of creating a million work opportunities over the next three years), and a set of strategic interventions to support black participation in agriculture;;
  • Emphasis on the enforcement of the 30-day payment policy by government: considering that the practice of bill backs has presented numerous challenges for the sector, it is encouraging to hear National Treasury taking such a tough stance on this matter; .

We commend the National Treasury for a balanced budget overall, and particularly on what seems to be a trend of embracing travel and tourism. It seems the message about the economic of travel and tourism is filtering through the hearts and minds of key decision-makers within Cabinet and government.

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