What the property market hopes to hear from the budget speech
The Minister of Finance, Tito Titus Mboweni, will deliver the National Budget Speech 2020 in Parliament on 26 February 2020. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, is hopeful that this speech will address some serious concerns that are limiting economic growth and putting pressure on the local housing market.
“We need to stop treating the symptoms and begin to attack the disease. Until such time as tough decisions are made to eradicate corruption and mismanagement, there will be little a Finance Minister can do to stimulate growth and attract investor or consumer confidence. Promises that lack timeous implementation and follow-through are unacceptable when one considers the current state of affairs. Moody’s, Fitch and S&P, as well as the South African public, are tired of waiting for things to change,” Goslett explains.
“Our issue has not merely been a lack of revenue growth. It has been decades of irregular and wasteful spending. Increasing tax rates and introducing new tariffs will not resolve the problem. In fact, it will exacerbate a further exodus of tax-paying, skilled labourers who are not prepared to see their hard earned Rands further squandered. People are tired of tax money disappearing into a bottomless pit. I therefore hope that there will be an effective solution around SOEs to either restore them or sell them to get back to a profitable state.”
Speaking of tax rates, Goslett hopes that the finance minister will consider implementing reforms that reduce the cost of tax compliance that makes doing business in this country incredibly challenging for small- to medium-sized enterprises. “RE/MAX of Southern Africa has over 1,000 more agents than our closest competitor. This is because our brand recognizes the value of entrepreneurship and encourages and enables our agents to be entrepreneurial-minded and form teams to help them sell more homes. This in turn creates greater employment opportunities and stimulates the economy. If the finance minister could implement policies that similarly encourage and enable the success of new entrepreneurs, they can significantly reduce unemployment figures,” says Goslett.
As a final hope for the budget speech, Goslett suggests that a reduction in transfer duties will greatly increase people’s ability to purchase property, which will help towards solving our nation’s housing crisis.
“At the end of the day, this country does not have an economic problem. It has plentiful resources and immense growth opportunities. There should be no reason we are not among the world’s elite economies if we can just deal with mismanagement and effectively follow through on corruption and consequences for corrupt individuals,” Goslett concludes.
