PREDICTING GORDHAN’S MOVES
Companies can make the best of budget
Companies with strong government liaison capabilities will be best placed to take advantage of emerging opportunities, writes William Attwell
In late 2016, when the three main credit ratings agencies conducted their year-end reviews, SA narrowly avoided a downgrade to subinvestment grade. Markets viewed this as a vote of confidence in Finance Minister Pravin Gordhan’s plan — outlined in his October mini budget speech — to stabilise finances and restore growth. The rand stabilised and business sentiment improved, suggesting better business conditions in 2017. However, critical details of Gordhan’s programme will be announced only in the full budget in February, including several measures that will directly affect companies’ performance in the year ahead. State revenue collection has not kept pace with the government’s spending plans. To help plug the fiscal gap and reduce the need for heavier borrowing (a major concern for ratings agencies), Gordhan announced in October that the overall tax take would rise by R28bn in 2017 and R15bn in 2018, but he provided no specifics. In all likelihood, the government will proceed with ...
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