Budget will aid economic recovery

The biggest positives in the Budget were obviously the huge allocation made for the purchase and distribution of Covid-19 vaccines, and the decision by Government to withdraw the R40bn worth of income tax hikes that had been proposed during the Medium-Term Budget Review in October.

From a real estate point of view, we will only be able to sustain or grow the current level of activity in the market if there is significant economic recovery and job creation within the next 12 to 18 months - and that can only happen if SA rolls out vaccines and achieves "herd immunity" in tandem with its main trading partners around the world.

Consequently, we are very pleased with the Budget commitment to spend at least R10,2bn on the purchase and distribution of vaccines over the next two years - although we remain concerned about the lack of detail from Government as regards the actual rollout timetable.

It is also good news that SA's hard-pressed consumers will face no personal tax increases this year - "although this concession will probably actually make very little difference to household budgets in the light of the recently approved 15% hike in Eskom electricity tariffs and the 15c/litre increase in the fuel levly which will take effect from 1 April, as well as the 8% increase in the price of alcohol and tobacco.

Also positive from the property point of view were the R4bn allocation for the development of new small and rural businesses, and the R3,4bn allocation to a Tourism Equity Fund, as well as the news that SARS is committed to lowering the corporate tax rate from its current 28%, and is already reviewing its travel and home office allowances in the light of the widespread move to working-from-home.

It was disappointing, though, that Treasury found no money to support home ownership by reducing property transfer duty - although it did make a R7bn allocation to bail out the Land Bank once again.

And, even though the economy is expected to grow by 3,3% this year (compared to a decline of more than 7% last year), the country's gross debt levels remain worryingly high at R3,95trn currently - with far too much being spent on repayments rather than the redevelopment of infrastructure and the employment creation that is the current biggest need in SA