Professionals' confidence that budget speech will address SA's economic needs is low - Survey

South Africa’s graduate professionals recorded a confidence level of just 42% when asked how confident they were that the upcoming budget announcement will address the country's economic growth needs. This is according to the latest results from the fourth quarter 2014 PPS Professional Confidence Index (PCI) which surveyed over 4 300 graduate professionals.

Finance Minister Nhlanhla Nene is set to deliver his budget speech to parliament on 25 February 2015, with many expecting an increase in taxes to assist with the extra R12 billion required to fund this year’s budget.

Macy Seperepere, Manager: Professional Associations at PPS, says it is not surprising that professionals do not feel confident that the budget speech will address the economic problems facing the country. “It is likely that many graduate professionals fear that the Government will look to increase taxes, particularly amongst higher earning South Africans, as a solution to finding the necessary funds to sustain the economy.”

She highlights that of the 3.3 million taxpayers, 1.5 million people contribute 84% of personal income tax collected by the South African Revenue Service, which means essentially very few people are supporting a huge economy.

The PCI also recorded a confidence level of just 49% when respondents were asked how confident they are about the economic outlook for South Africa over the next 12 months. This result dropped two percentage points quarter-on-quarter, but more significantly, 15 percentage points since the first confidence level of 64% was recorded for this question in the second quarter of 2011.

It is interesting to note that even though the inflation rate has been brought down to 4.4% in January 2015 from 5.3% in December 2014, people are still not confident in the economy, says Seperepere. “While there could be a number of reasons why the country’s graduate professionals have low confidence in the economy, load shedding is the most notable at the moment. The implementation of load shedding has left many people uncertain about the country’s future electricity supply.”

Eskom has warned that there will be a ‘high probability’ of load shedding for 62 days during February, March and April. Based on Nersa’s findings which found that the 2007-2008 energy crisis cost the SA economy R50-billion, equating to R2.17-billion per day, it has been estimated that these 62 days of load shedding could cost the economy over R134-billion.

“It is vital that the economic issues facing the country are addressed in order to regain the confidence in the local economy among South Africa’s graduate professionals so that the country remains a viable option for their future,” concludes Seperepere.

Other results from the survey

• Confidence that crime rates would improve in SA over the next five years dropped one percentage point quarter-on-quarter to 37%;
• Confidence that unemployment in SA will improve over the next five years increased by one percentage point quarter-on-quarter to 37%;
• Confidence in the future of the healthcare system increased one percentage point quarter-on-quarter to 45%;

Click here to see survey.