Budget 2020: Business’ top priorities

Today is budget day.

In anticipation of the budget I asked 20 senior people in the financial sector (asset managers, economists and bankers), what they thought was most needed in the budget speech to ensure a positive outcome for the economy.

Their responses differed very little and there were little surprises. It seems that macro-economics are not so complicated after all – well, that is if you can leave politics out of it.

So, Minister Mboweni, if you are still tweaking the speech, here are their top requests:

1) Urgent Structural reform is needed:

Overall there is an understanding that to get the economy on a healthy footing again, some politically unpopular decisions will have to be taken regarding structural reform. But as unpopular as they might be these decisions cannot be avoided and must be implemented with a sense of urgency.

2) Spending cuts – in particular the public sector wage bill:

As one asset manager put it, when asked his top 3 priorities: Austerity, austerity and austerity. Unsurprisingly there is huge concern about government spending.

Every person I spoke to raised the need to reduce government spending , in particular public sector wages. “Well for us, the most important thing is getting the budget to balance!

And the only way to do that now is to bring down operational expenditure and specifically the wage bill,” responded an investment specialist. (Some mentioned an amount of R150bn that could be saved by reducing wage packages.)

Yet, there is an understanding that the pain must be shared and that it can’t only be affecting the lower paid workers. “The public sector fat cats must also feel some pain” said one asset manager. “Personally, I would like to see teachers and nurses paid more, and cutting entitlements for political office bearers,” said another.

“What happened with the intention to reduce the size of cabinet and consolidate government departments?” asked an economist.

3)…