Mbeki pledges support for automotive industry

GOVERNMENT HAS budgeted R5-billion in tax incentives over the next three years to promote industrial development, President Thabo Mbeki said in his recent State of the Nation Address at the opening of Parliament. A further R2.3-billion has been budgeted for “industrial policy initiatives” as part of the Industrial Policy Action Plan (IPAP). The Action Plan is designed to facilitate fast track implementation of development in the four lead sectors of the South African economy – capital/ transport equipment and metals; automotives and components; chemicals, plastic fabrication and pharmaceuticals; and forestry, pulp and paper, and furniture. “I would like to emphasise that we remain determined to support the automotive sector and will therefore ensure that the support given to this sector through the Motor Industry Development Programme is maintained. According to the DTI, the major weaknesses identified in South Africa’s long-term industrialisation – which the NIPF and IPAP will address – is the decline in the share of employment in the country’s traditional tradable sectors of mining and agriculture. The main objective of the NIPF is therefore to facilitate diversification beyond South Africa’s current reliance on traditional commodities and non-tradable services.