Must Read: All You Need To Know About S.A’s Mini Budget

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Here is all you need to need to know about South Africa Mini-Budget

S.A requires a new approach

  • Sustaining progress towards national development requires new approach
  • Economic cycle has reached lowest point; recovery is emerging
  • Without decisive action, recovery is likely to be weak & ineffectual
  • Joint action needed to restore confidence and  mobilise private investment
  • Rapid progress on National Development Plan reforms can bolster confidence and promote investment

Economic forecasts

  • Roaring growth not expected over next 3 years
  • S.A’s economic growth estimate for 2016 revised down to 0.5% from 0.9%
  • Moderate recovery in growth expected over next 3 years; reaching 2.2% in 2019
  • Inflation forecast revised down to 6.4% for 2016
  • Inflation expected to remain close to 6% annually over medium term
  • Electricity prices expected to put pressure on inflation
  • Household consumption expenditure growth expected to reach 2.3% 2019
  • Government investment expected to average 4.8% growth over medium term
  • Public corporations investment expected to reach 2.3% growth in 2019
  • Government has budgeted R987bn for infrastructure over next 3 years
  • Government infrastructure spend to be on energy, transport & telecommunications

S.A’s budget deficit needs to be narrowed

  • MTBPS seeks to narrow budget deficit & stabilise debt
  • Budget deficit for 2016/17 is projected at 3.4% of GDP;  higher than 2016 estimate of 3.2%
  • Gross tax revenue projected to fall short of Feb estimate by R36bn in 2017/18 & R52bn in 2018/19
  • MTBPS proposes R26bn in reductions to expenditure ceiling over next 2 years
  • Proposed tax measures amount to R13bn in 2017/18
  • Total revenue increases estimate to amount to R43bn over next 2yrs
  • Net national debt expected to stabilise at 47.9% of GDP in 2019/20
  • Revenue estimates are below 2016 Budget projections
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Where the money will go

  • Reductions to spending ceiling of R10bn in 2017/18 & R16bn in 2018/19 proposed
  • Spending on core social & economic priorities will be sustained
  • Funds to be reallocated to ensure priorities are met
  • Public works programmes that contribute directly to employment to grow rapidly
  • Grants that support people living with HIV/AIDS will increase by 13.6 pa
  • S.A to establish financing facility for social infrastructure.
  • Child support grant raised by R10 to R360 t
  • Total government spending is expected to grow at 7.6%, see graph

MTBPS_fig 4.2

Students to get more

  • Government proposes an additional R17.6bn to post-school education & training
  • Allocations to higher education institutions over medium-term to grow at 11% each yr
  • Allocations to post-school education & training will be the fastest growing
  • University subsidies will grow at 10.9% PA
  • Money to NSFAS to grow at 18.5% pa

MTBPS_fig 4.4

State-owned enterprises

  • Advisers to be appointed to explore options for SAA shareholding

Public wage bill

  • Public sector employment needs further moderation

Procurement reforms

Public Procurement Bill being considered by Cabinet before April 2017. The bill aims to consolidate the legal and policy framework for supply chain management

Transparency

Treasury launches open local government financial data portal for citizens called Municipal Money

 

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