Mar 2022 2nd edition

Citizens to benefit from 2022 Budget

The 2022 National Budget brought good news to South Af­ricans as government has reiterated its commitment to making the lives of citizens better.

This will be done by sup­porting vulnerable and low-income households; improving education, health and capital investment; addressing service delivery challenges; providing tax relief; and continuing the fight against crime and corruption.

Finance Minister Enoch Godongwana said government needs to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. “This budget presents this balance,” he said.

Over the next three years, R3.33 trillion has been allocated to the social wage, to support vulnerable and low-income households; and, over the medium-term, R76 billion has been allocated for job creation programmes. 

“This year, an additional R18.4 billion has been made available for the Presidential Employment Initiative,” the Minister added.

Social grant increases

The Department of Social Development will receive R58.6 billion over the medium-term to initiate a new extended child support grant for double orphans; provide for inflation increases to permanent social grants; and extend the Social Relief of Distress (SRD) Grant.

The increases are as follows:

  • Old age, war veterans, disability and care depen­dency grants increase by R90 in April 2022, and a further R10 in October 2022;
  • Foster care and child support grants increase by a once-off R20 in April 2022.

In addition, R44 billion has been allocated for the 12-month extension of the R350 SRD Grant.

Uplifting citizens

In 2017, government announced a policy for fee-free higher education. An addi­tional R32.6 billion has been allocated for financial support to current bursary holders and first-year students under the National Student Financial Aid Scheme.

  In addition, R24.6 billion has been allocated to provincial education departments to address shortfalls in teacher compensation.

  Provincial health departments will receive an additional R15.6 billion to support their continued response to COVID-19, bridge short­falls in essential goods and services. About R3.3 billion has been allocated to absorb medical interns and commu­nity service doctors.

An amount of R28.9 bil­lion has been allocated to improve service delivery and uplift citizens. “Basic municipal services require more support, especially for the poor,” Minister Godong­wana said.

Fighting corruption

The police budget has increased by R8.7 billion, and R1 billion will be used to implement personnel reforms.

In addition, the Depart­ment of Justice and Constitutional Develop­ment’s budget has increased by R1.1 billion, while the Office of the Chief Justice receives R39.9 million more.

Tax relief

“Now is not the time to increase taxes and put the recovery at risk. Accor­dingly, we have decided to keep money in the pockets of South Africans,” the Minister said.

As such, R5.2 billion in tax relief will help support economic recovery, provide some respite from fuel tax increases and boost incen­tives for youth employment.

Personal income tax brackets and rebates will be adjusted by 4.5%, in line with inflation.

The annual tax-free threshold for people under 65 will increase from R87 300 to R91 250. Medical tax credits will increase from R332 to R347 per month for the first two members, and from R224 to R234 per month for additional members.

No increases will be made to the general fuel levy on petrol and diesel for 2022/23. “This will provide tax relief of R3.5 billion to South Africans.”

There will also be no incre­ase in the Road Accident Fund levy.

Economic reconstruction and recovery

The Minister said that it is only through sustained economic growth that South Africa can create enough jobs to reduce poverty and inequality, and reach its goal of a better life for all. The Economic Reconstruction and Recovery Plan (ERRP) thus remains essential to growth.

“We are accelerating the implementation of critical structural reforms contained in the ERRP, in particular, in electricity, rail, ports and telecommunications.”

To complement these interventions, government will accelerate infrastruc­ture investment, which is the backbone of a thriving economy.

“As we upgrade roads, bridges, water and sewer, transport, school infra­structure and hospitals and clinics, the aim is to unlock higher levels of employment for those involved in the projects,” the Minister said.

A provisional allocation of R17.5 billion has been set aside over the medium term.

Supporting SMMEs

A business bounce-back scheme of R20 billion is being launched to support businesses in distress.

The scheme will include small business loan gua­rantees of R15 billion, which will be launched in March 2022; and, by April, a business equity-linked loan guarantee support mecha­nism will be introduced.

Alcohol, tobacco and sugar increase

Excise duties on alcohol and tobacco have increased by between 4.5% and 6.5%, as follows:

  • A 340ml can of beer or cider: 11 cents;
  • A 750ml bottle of wine: 17 cents;
  • A bottle of sparkling wine: 76 cents.
  • A bottle of spirits: R4.83;
  • A packet of cigarettes: R1.03;
  • Twenty-five grams of piped tobacco: 37 cents.

The health promotion levy has been increased to 2.31 cents per gram of sugar.

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