The new Finance Minister Nhlanhla Nene, will present his first budget to parliament later this month. This follows his mid-term budget review in October which was largely received with confidence by the markets and business.
Rob Cooper – director of legislation updates and proposed legislation at Sage VIP, a developer of payroll and HR management software and services – believes that this budget should be one of the most interesting in recent years, with the finance minister having to take some decisive action on various service delivery challenges.
Here are three things to look out for in the budget speech that could have an impact on businesses according to Cooper.
National minimum wage
Minister Nene could provide some insight as to whether companies will need to factor a minimum wage into their payroll budgets in years to come.
National Health Insurance
Depending on how government decides to fund the scheme, all employees may need to make mandatory contributions to the scheme, which means there will be a new item to manage in the payroll in future years.
This is a complex area that affects employees, businesses, medical insurers, and healthcare providers – so it will take years to thrash out the finer details. Still, I’m hoping that we will get some guidance about the form the National Health Insurance scheme will eventually take.
These reforms are supposed to harmonise the tax treatment of pension and provident funds, in turn encouraging South Africans to save for retirement. Yet they were postponed, apparently because of trade union opposition.
As far as anyone can tell, trade unions want these reforms to be looked at alongside social security reforms such as a proposal to introduce a national retirement fund. The Finance Minister’s comments could give guidance as to whether such a proposal has broad support in government.