Tourism Business Council assesses impact of budget speech on tourism industry

{ Posted on Aug 13 2013 by B-man }
Categories : Travel news

The Tourism Business Council of South Africa’s CEO Mmatati Marobe has come out in praise of the Minister of Finance Pravin Gordhan’s delivery of a bold budget under difficult circumstances.

She says: “It was indeed a tough balancing act for the minister, given the current economic climate and the macro-economic challenges the country faces. However, the minister’s speech really gave us confidence to remain optimistic about the economy. Although the budget does not directly speak to us a sector, there are aspects of the budget that will have strong implications for tourism.”

The TBCSA gave the thumbs up to the issues of promoting youth employment, public private partnerships (PPP) and benefits from increased allocation to other portfolios.

Areas of concern include the monetary policy and exchange rate and some of the new tax proposals.

Marobe says on promoting youth employment: “Young people are the lifeblood of the tourism industry. Although we still need to review the final details of this bold initiative, the sector stands firmly behind government. We look forward to playing a role in this drive and hope to see the incorporation of current skills development programmes in the final implementation plan, so that there is continuity in the career development of these young people.”

“We would like to take this opportunity to put forward our suggestion for Minister Gordhan to consider involving the youth in the country’s safety and security initiatives – more specifically, to reflect on our bid for the establishment of a tourist police force. We made this proposal in response to the Minister of Police’s announcement last year to enrol young people in safety and security initiatives across the country”.

On the PPP issue, Marobe says: “Through projects such as the Tourism Service Excellence Initiative, the Hospitality Investment Conference Africa and the Tourism Safety Initiative among others, the TBCSA has seen the value of involving different stakeholders to work for a common vision. We certainly look forward to more cooperation and partnerships with government in particular, to ensure that business continues to thrive and enhance quality in service delivery.”

On the increased budget allocation to other portfolios, Marobe says it is particularly encouraging to see the focus on education, the armed forces and the police, health (HIV and TB treatment), rural development and local government.

“We recognise the need for government to focus its attention towards social issues and acknowledge that these issues will not be solved overnight. In the short-term, tourism will reap the rewards, from the expenditure and infrastructure development triggered by the preparations for the soccer World Cup. However, in the long-run, the sector will still require further investment to boost tourist arrivals and expenditure. We urge the Treasury to take cognisance of this for future budget allocations.”

The TBCSA expressed concern over the minister’s statement that “monetary and exchange rate consideration are important elements both in adapting to global developments and in creating an environment supportive of growth and employment creation”.

This statement has greater significance for the tourism sector given that international tourism forms a major part of the sector’s overall economic contribution.

“We have confidence that both Treasury and the Reserve Bank will ensure that the country’s monetary policy supports the overall objective of sustainable economic growth. We obviously welcome the Minister’s announcement to review the exchange control regime in the country. Nevertheless, we need to appeal to the Treasury and the Bank to consider the impact that any steps taken to counter the volatility of the currency will have on the tourism sector,” Marobe cautions.

She explains that South Africa as a tourist destination has always been positioned and marketed as a ‘value for money destination’ and the industry wants to maintain that image.

“We have stiff competition from the likes of Thailand, Australia and Kenya to contend with and as such we need a stable but competitive currency to support our work. We will closely watch with interest the review that the Treasury will be putting forward and we hope we will be given the opportunity to make comments in this regard,” she adds.

While the personal tax relief of R6.5-billion is welcomed, the TBCSA is concerned about the impact of the fuel tax increase of 25.5/litre. This is expected to have a negative effect on the transport side of the sector, including tour operators who specialise in transfer services and long distances excursions for tourists, coaching services and the vehicle rental and leasing service providers.

Marobe concludes: “As a sector, we were able to derive meaning from the president’s State of the Nation address through the budget speech. Government has made its intention clear and we are ready to make our contribution to build a sustainable economy and nation.”

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