SA’s 2017/18 Budget: African National Congress (ANC) Secretary-General Gwede Mantashe has applauded finance minister Pravin Gordhan for presenting a well-balanced budget this year.
Despite crafting the budget in the midst of very difficult economic conditions, the ruling party’s scribe said the minister showed much skill both on paper and in the oral presentation.
He commended the embattled minister for prioritizing the economic sector and for bringing the need for urgent transformation to the spotlight.
Mantashe explained that it is important for people to participate actively in bringing about positive changes in the country; adding that the government, alone cannot ensure that transformation takes place in the country.
“People must participate and that is why we must change the narrative of delivery which implies sitting back and waiting for the state,” he said.
He also expressed happiness with Gordhan’s emphasis on education, ading that the government must learn to invest and groom the education sector for better results.
Mantashe explained: “More important to me, was the emphasis on education. If you invest in higher education, you invest in the future. But the minister correctly emphasized that you can’t just throw resources at higher education, we must actually look through the system, invest in basic education and development.”
Finance minister Pravin Gordhan delivered his budget speech on Wednesday afternoon in the National Assembly. He brought to the fore the necessity of growth and transformation in the country – stressing that both go hand-in-hand.
That said, he also indicated that fiscal consolidation will continue. Thus, an additional R28bn will be collected in the coming financial year by means of those earning more than R1.5m per year paying 45% of that back to the taxman (the top rate was previously 41%), limited adjustment for bracket creep, a fuel levy rise of 30 cents per litre, a higher dividend withholding tax rate and the usual rise in sin taxes (excise on alcohol and tobacco).
Sin Taxes Rise
Taxes on alcohol and tobacco are set to rise as follows:
Fortified wine 26c/750ml;
Ciders and alcoholic fruit beverages 12c/340ml;
Unfortified wine 23c/750ml;
Sparkling wine 70c/750ml;
Cigarettes 106c/packet of 20;
Cigarette tobacco 119c/50g;
Pipe tobacco 40c/25g; and
Social Grant Spending And Increases
Spending on social grants is set to rise from R164.9bn in 2016/17 to R209.1bn by 2019/20, growing at an annual average of 8.2% over the medium term.
The specific increases are:
• State old age grant from R1 505 to R 1 600 per month;
• State old age grant, over 75s from R1 525 to R1 620;
• War veterans grant from R1 525 to R 1 620;
• Disability grant from R1 505 to R 1 600;
• Foster care grant from R890 to R920;
• Care dependency grant from R1 505 to R1 600; and
• Child support grant from R355 to R380.
Specific Spending Over The Next Three Years
Over the next three years, the government will spend:
• R490bn (R457bn last year) on social grants.
• R106bn (R93.1bn) on transfers to universities, while the National Student Financial Aid Scheme will spend R54.3bn (R41.2bn).
• R751.9bn (R707.4bn) on basic education, including R48.3bn for subsidies to schools, R42.9bn for infrastructure, and R12.7bn (R14.9bn) for learner and teacher support materials.
• R114bn (R108.3bn) for subsidized public housing.
• R94.4bn (R102bn) on water resources and bulk infrastructure.
• R189bn (R171.3bn) on transfers of the local government equitable share to provide basic services to poor households.
• R142.6bn to support affordable public transport.
• R606bn on health, with R59.5bn on the HIV/Aids conditional grant.
For more information on the 2017/2018 budget, click here