Berry Everitt, MD of the Chas Everitt International property group says the priorities of this year’s Budget were largely as expected in an election year, when government is obviously trying to seek favour with as many potential voters as possible.
“The focus on education, health, housing and infrastructure, grants and pensions was thus almost inevitable, and it is also no surprise that the widely rumoured tax increase for the wealthy did not materialise.”
Nevertheless, he says, Finance Minister Pravin Gordhan did well to “more or less” balance these social demands with the need to prove to the ratings agencies like Moody’s, Fitch and Standard & Poor’s - and thus to international investors - that there is a steady hand on SA’s the financial tiller and that the country is sticking to a plan to reduce its spending, grow the economy and cut its budget deficit.
“And in this regard we were pleased to hear the Minister underline his commitment to cutting government spending, although we believe more attention should have been be paid to reducing the public sector wage bill – unpopular as this might be in an election year. Salaries and wages for public servants currently make up more than 40% of all government expenditure and this does not sit well with taxpayers in the light of the large scale wastage and corruption that is increasingly evident in the public service.”
“From the real estate point of view,”Everitt says, “we were concerned that the Minister was not more specific about the government’s plans to achieve economic growth – and specifically to support small business, as it is always the best creator of jobs and, ultimately, housing demand.
“Having said that, however, the residential property market is currently flourishing, with the recent interest rate increase having caused barely a ripple, and we will be well satisfied if the 2014/15 Budget helps to create positive investor sentiment, stabilise the currency and keep the need to any further rate increases to a minimum.
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Article by: www.chaseveritt.co.za/