Mar 2019 1st Edition

Budgeting for a brighter future

Finance Minister Tito Mboweni has called on the nation to embrace President Cyril Ramaphosa’s State of the Nation Address task list, so that we can become a better South Africa.

During his recent Budget Speech in Parliament, Minister Mboweni assured South Africans that the country is on a bold new path and spoke about what government plans to do for the nation and its citizens.Finance Minister Tito Mboweni delivers the Budget Speech.

The Minister said that the Budget focuses on six areas. These  include achieving a higher rate of economic growth; increasing tax collection; reasonable, affordable expenditure; stabilising and reducing debt; reconfiguring state-owned enterprises (SOEs); and managing the public sector wage bill.

“Taxes raised in wealthier areas fund poorer provinces and municipalities. In this budget, 47.9 percent of nationally-raised funds have been allocated to national government, 43 percent to provinces and 9.1 percent to local government. Pro-poor spending continues to grow in real terms,” he said.

Spending priorities

The budget proposes spending of R5.87 trillion over the next three years, with the largest allocations being R1.2 trillion for learning and culture; R717 billion for health services, including the National Health Insurance; and nearly R900 billion for social development.

Fully subsidised education and training for the poor is government’s flagship higher education intervention. It will spend R111.2 billion to ensure that deserving students from poor and working-class families are able to obtain qualifications at universities and technical vocational education and training colleges.

For health, R2.8 billion has been reprioritised to a new human resources grant; R1 billion for medical interns; and R1 billion will be used to raise community healthcare workers’ wages to R3 500 per month.

Government continues to support people who want to own their own homes and R14.7 billion has been reprioritised to two new conditional grants for informal settlement upgrading, which will provide these households with basic amenities. “Our Help to Buy subsidy helps first-time home buyers purchase a home. As a pilot, it gets R950 million over three years,” the Minister said.

Job creation

Government has allocated R19.8 billion to industrial business incentives, which includes R600 million to the clothing and textile competitiveness programme. “This will support 35 500 existing jobs and create 25 000 new jobs over the next three years,” he added.

The Jobs Fund is an important part of  private sector job creation. “It has disbursed R4.6 billion in grant funding and created over 200 000 jobs since inception. The allocation will rise over the next three years to R1.1 billion. In addition, R481.6 million was allocated to the Small Enterprise Development Agency to expand the small business incubation programme.”

When it comes to land reform, government has allocated R1.8 billion to 262 priority land-reform projects and has set aside R3.7 billion to assist emerging farmers to acquire land to farm.

Dig deeper

Excise duty increases will see consumers digging deeper for alcohol and cigarettes, with the duty on a can of beer going up to R1.74 and increasing to R3.15 for a 750 ml bottle of wine. Whiskey drinkers will pay R4.54 more and smokers have to fork out an extra R1.14 per pack of 20.

 An excise duty is tax levied on goods during the manufacturing stage, rather than at sale.

Fuel levies were increased by 29 cents per litre for petrol and 30 cents per litre for diesel.

Eskom wonít be bailed out

President Ramaphosa’s plan to stabilise electricity is the subdivision of Eskom into three independent components which, the Minister said, will allow for more competition, transparency and a focused funding model.

He said that national government will not take on Eskom’s debt. “Pouring money directly into Eskom in its current form is like pouring water into a sieve. I want to make this clear. Eskom took on the debt and it must ultimately repay it,” added the Minister.

Government is setting aside R23 billion a year to financially support Eskom during its reconfiguration. “Support is conditional on an independent chief reorganisation officer being jointly appointed by the Ministers of Finance and Public Enterprises, with the explicit mandate of delivering on the Presidential Task Team’s recommendations,” he said.

Social grant increases

R80 – Increase for old age, disability, war veterans and care dependency grants.

R40 – Increase for the foster care grant.


R717 billion – For health services, including the National Health Insurance.


R30 billion - To build new schools and maintain infrastructure.

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