To:    NAAMSA Members

Ladies and Gentleman,

NAAMSA MEDIA RELEASE ON THE 2004/2005 BUDGET:

FOR IMMEDIATE RELEASE

Commenting on the budget proposals announced by the Minister of Finance, Mr T Manuel, in Parliament today – the President of the National Association of Automobile Manufacturers of South Africa (NAAMSA), Mr Ian Robertson, said that stability and discipline in governments’ fiscal policy approach represented the corner stone of the Minister’s Budget Speech. Continuing, Mr Robertson commended the Minister’s emphasis on the proposed further increases in funding for a broad range of social priorities, services and infrastructural spending.

Despite the limitations facing government on the revenue side, the Minister had nevertheless been able to provide further modest tax relief in the area of personal income tax to compensate tax payers for fiscal drag.

South Africa remained well positioned to achieve a higher growth rate, over the medium term, and assist the process of employment creation. In this context, the budget proposals represented a balanced approach to the many challenges facing the country and were consistent with the key goal of placing the South African economy on a higher growth path.

With specific reference to the automotive industry, Mr Robertson noted the Minister’s stated intention that during the 2004/5 tax year the authorities intended to review fringe benefit taxation of motor vehicle allowances as well as the advalorem excise duty structure. In this regard, Mr Robertson welcomed the Minister’s undertaking that proper and extensive consultation with all relevant stakeholders would take place as part of such a review.

In conclusion, Mr Robertson said that the budget proposals would support business confidence and consumer sentiment in South Africa.

NAAMSA OFFICES: PRETORIA
18th February, 2004