Revenue figures show impact of recession

The extent to which the freight and trading industry has been hit by the global recession is shown in government’s revenue figures for the past financial year. According to finance minister Pravin Gordhan, government experienced “one of the most challenging periods for revenue collection since 1994”. Value-added tax – an indication of the health of the retail sector, which in turn keeps the wheels of the freight industry turning – was R22-bilion less than last year’s budget estimate, and over 5% lower than the year before. “Customs duties will be R6 billion below target,” he added – an indication of what both the fiscus and Transnet have lost through reduced volumes through the ports. Exports dropped by over 20% last year, and imports by 18.3%. But, the government expects things to improve. Gordhan is budgeting for a 3.8% growth in exports and 6.8% increase in exports. Freight volumes will stay depressed along with the rest of the economy for some time to come, warned Gordhan and economists. Cees Bruggemans, chief economist of First National Bank, said the Minister may have been accommodative, and the economy in recovery, but for many the times will remain tough, particularly for the working and middle classes that form the “backbone” of our modern economy.