Advice and Opinion

2016 Budget comment: RealNet Property Group

What was especially notable about today’s Budget, says Jan Davel, MD of the RealNet property group, was the apparent willingness of Government – in the person of Finance Minister Pravin Gordhan – to openly admit to the economic problems that are currently facing SA and to the fact that a shift in many previously-held policies will be needed to address them.

“For example, Mr Gordhan was very careful also to explain how the Budget would specifically address issues that have been in the headlines recently, such as the drought, student protects and the wastage of money through corruption, and at the same time repeatedly made reference to the need for more public and private sector co-operation in financing and managing important projects”.

“Overall, we were also pleased with the steps taken to address the concerns of both investors and the international credit rating agencies, who will hopefully now refrain from downgrading SA’s credit status to junk, and give us all the opportunity to focus on boosting economic growth and employment and earning the revenue that is needed to achieve more transformation and equality in our shared society”.

“As a Proudly South African company, we were also encouraged by the measures announced to promote the establishment and growth of more small businesses and to foster entrepreneurism, especially in SA’s rapidly growing cities, and pleased with the general inclusivity of the income tax and levy changes that were announced”.

“We also understand the Minister’s reluctance to introduce an increase in VAT at this time of high food prices and rising interest rates, even though it might have helped to spread the tax burden a little more evenly. And from a real estate point of view, we are of course pleased with the huge new allocation to the Human Settlements Department and to municipalities for transport and infrastructure improvements – although less enthusiastic about the Capital Gains Tax increase and a Transfer Duty increase on high-end properties”.

“In short, we think the Minister has done well with the limited resources and time at his disposal, and hope that his department will be able to implement the bulk of the proposals made today, especially with regard to education, health, job creation and infrastructure maintenance and improvement.”