Budget Comments from Harcourts Real Estate

Finance Minister Pravin Gordhan has met one of his biggest challenges in yesterday’s Budget, says Harcourts Real Estate CEO Richard Gary, in that he has managed to contain the expected deficit over the next year to 4% of GDP.

“This is a substantial decline from the 6,8% of GDP reached in 2010 and should reassure the ratings agencies that currently have SA “on watch” and also help to boost the foreign and local private sector investment so desperately needed for job creation.”

Also positive, he says, is government’s renewed and apparently extended commitment to cutting expenditure and reducing wastage in the public sector. “Apart from anything else, this is essential if government hopes to be able to deliver on its deficit containment promise, although to date there has not been much evidence of this being implemented, and it is not likely to be popular in an election year.”

In this regard, he says, potential voters are also likely to appreciate the additional allocations for on education, healthcare, infrastructure, grants and pensions, as well as the news that government aims to deliver more than 200 000 new social housing units this year – all of which will also be good for the real estate market in the long run.

“And of course everyone will welcome the Minister’s ‘present’ of R9,3bn worth of personal tax relief, but we are disappointed that there were not more specifics on what government plans to do to really boost economic growth over the next few years and deliver on its massive job creation promises.

“In short, we believe the Budget was somewhat long on promises and short on realities, although this was probably to be expected in an election year when no government wants to introduce major changes or rock the boat too much.”

Article from: www.harcourts.co.za

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