Yesterday afternoon of the 26th of February 2020, the Minister of Finance, Tito Mboweni tabled South Africa’s Budget for 2020/21 in Parliament, Cape Town. No loadshedding had been implemented before the budget this week. We expect loadshedding to be back after the budget is presented.
With current unreliable electricity supply. The stable supply of electricity is the government’s number 1 priority task. R230 billion has been allocated over ten years to achieve the restructuring of the electricity sector
Some of the noteworthy points in the budget include:
-Revenue is projected to be R1.58 trillion, or 29.2 per cent of GDP. Expenditure is projected at R1.95 trillion, or 36 per cent of GDP. This means a consolidated budget deficit of R370.5 billion, or 6.8 per cent of GDP in 2020/21.
-Gross national debt is projected to be R3.56 trillion, or 65.6 per cent of GDP by the end of 2020/21.
TAX
-To support growth no major tax increases.
-A teacher who earns on average R460 000 a year, will see their taxes reduced by nearly R3 400 a year.
-Hard-working tax payers, who earn on average R265 000 a year, will see their income tax reduced by over R1 500 a year.
-Someone earning R10 000 a month will pay 10 per cent less in tax. Someone earning R100 000 a month will pay about 1.5 per cent less.
‘SIN TAX’
-340ml can of beer or cider will cost only an extra 8c
-750ml bottle of wine will cost an extra 14c
-750ml bottle of sparkling wine an extra 61c
-A bottle of 750 ml spirits, including whisky, gin or vodka, will rise by R2.89
-packet of 20 cigarettes will be an extra 74c
-25 gram of piped tobacco will cost 40c more
-23 gram cigar will cost an extra R6.73
-sorghum beer unchanged
-Hubbly to start being taxed at 75% rate of cigarettes.
-eCigarettes aka Vapors will start being taxed 2021.
LEVIES
-fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and 9 cents is for the Road Accident Fund levy.
-plastic bag levy increased to 25 cents
WASTEFUL EXPENDITURE & CORRUPTION
-new law to stop excessive salaries in public entities and acceleration
in merging and consolidating public entities.
-Steps implemented to contain running costs include Abolishing the current wasteful subsidence and travel system; Replacing the cell phone policy (contract phones) and equiring economy class travel for all domestic flights, except for exceptional circumstances
GOVERNMENT SPEND
-largest spending areas will be learning and culture, which receives R396 billion followed by health R230 billion, and social development with R310 billion.
-feasibility study for the establishment of a new university of science and innovation in Ekurhuleni as per State of the Nation.
-R500 million has been provisionally set aside for disaster management to respond to the impact of recent floods and the ongoing drought
YOUTH EMPLOYMENT
-8.2 million young people between the ages of 15 and 34 are not in education, employment or training. Government is committed to helping them
-Jobs Fund projects have created more than 175 000 permanent jobs, and helped 21 000 people into internships and created 59 900 short term jobs. Of these, 65 per cent went to youth.
-reprioritise resources to raise spending on this critical area of youth unemployment. More details to be provided in 2020 Medium Term Budget Policy Statement in October.
SOCIAL GRANTS
-more than 18 million grant beneficiaries.
-R80 increase for the old age, disability and care dependency grants to R1860 per month
-R80 increase in the war veterans grant to R1880
-R40 increase for the foster care grant to R1040 per month
-The child support grant will increase by R20 to R445 per month
Increases, changes and allocations in the budget will be effective as at 1 April 2020.
