Cape Chamber welcomes Western Cape inter-governmental dispute amidst investor uncertainty
The private sector is facing a new epidemic of uncertainty prompted by Government fiscal mismanagement.
Unprecedented in-year budget cuts announced by Finance Minister Enoch Godongwana look set to further erode local government service delivery in a country already buffeted by the impacts of load shedding and logistics challenges. For the business community, as much as for society at large, these cuts are disastrous, particularly as they stem from an increased public sector wage bill – at a time when millions of South Africans are already living in poverty.
It is for this reason that the Cape Chamber wholeheartedly supports the Western Cape Government’s decision to declare an intergovernmental dispute with national government. The move, confirmed last week by Provincial Premier Alan Winde, is intended to address concerns about the impact on budget cuts on critical services.
Announcing the decision Winde said national government appeared to be lacking ‘prudent fiscal consolidation, management, and discipline’. The Cape Chamber concurs with the Premier.
The in-year budget cuts are symptomatic of a floundering economy that is not getting the support it needs – and consequently is unable to generate tax revenue or create jobs. News last week that steel giant Arcelormittal intends closing its long steel products business is but one example of the knock-on effects of an uncertain business environment. The Company specifically referenced load shedding and logistics challenges as contributory factors in seeking greener pastures.
The Chamber will closely monitor the inter-governmental dispute in the hope that Government financial managers will find a way to support the economy rather than scare off much-needed investment.
President of the Cape Chamber of Commerce & Industry