Pravin Gordhan is a seasoned finance minister – but today’s Budget was possibly his toughest yet. Other than the nuts and bolts of numbers and percentages, he threaded key messages into it to attempt to give confidence and succour to a struggling country. Here are the bits of his speech we liked best. What do you think? Let us know on Twitter.
No austerityIt is not an austerity budget. Social grants are held steady and
increased at inflation. The old age, disability and care-dependency grants will
rise by R80 to R1500 in April, and by another R10 to R1510 in October. The
child-support grant will rise by R20 to R350 in April and the foster-care grant
by R30 to R890.
No Robin HoodIt is not a Robin Hood budget. Tax increases for higher-income
earners are nominal with relief for lower and middle-income earners. Taxes on
the rich happen on transfers of homes valued at more than R10 million. And
through increases in estate and capital-gains taxes.
No VAT increaseThere is no increase on Value Added Tax because the impact would be
felt on the poor.
FrozenFrom April 1, all state vacancies of managerial and administrative
posts are frozen pending assessment and new human-resource planning. Essential
services (teachers, nurses, doctors, fire-service workers) are excluded.
Budget deficit narrowsProjected to decline from 3.9% to 2.4% of gross domestic product
over the medium term.
Cars. Political office-bearers’ car allowances will be capped at R750 000
– not quite a VW, but neither the Audis, Mercs and BMWs favoured by the
political class.
R25 billionThe state will cut its budget by this amount over three years
through staff and procurement savings.
No sugar addedThere will be sugar tax.
#Feeshavefallen An additional R16 billion is allocated to higher education with the
national student financial aid scheme enjoying good increases over the medium
term.
Get thisThe National Student Financial Aid Scheme receives R2.5 billion to
clear the debt of 71 753 students for the 2013 to 2015 academic year. There is
an additional R8 billion for underfunded students over the next three years.
No SARS commissioner Tom MoyaneSouth African Revenue Service commissioner Tom Moyane was not at
the traditional press conference preceding the tabling of the budget. It is
clear there is tension with the Treasury and that something is afoot. State
revenues are down by just over 8%, but whether this is because of a smarting
economy or because of problems at SARS is not clear.
New boardThere is likely to be a new board at South African Airways within
weeks. Will the airline’s chairperson Dudu Myeni, who is also the chairperson of
the Jacob Zuma Foundation, lose her job? In the medium term, consideration is
being given to merging SAA and SA Express.
8 quotable quotes from Pravin Gordhan’s speech
“We [present this budget] in a spirit of frankness, both about our challenges and the opportunity to turn our economy’s direction towards hope, confidence and a better future for all.”
“I have a simple message. We are strong enough, resilient enough and creative enough to manage and overcome our economic challenges.”
“All of us want a new values paradigm, a society at peace with itself, a nation energised by the task of building stronger foundations for our future society and economy.”
“We have a plan…”
“We are conscious of the difficulties we face. Our resilience as a nation, black and white, can propel us to a better future if we make the right choices.”
“The combination of multiple demands and constrained resources at times seems overwhelming. How does the state deal with such complexity? What should we stop doing? How can we achieve inclusive growth?”
“It is a plan for a strong mixed economy – in which public services and state actions complement private investment, expansion of trade and social enterprise.”
“The joint actions we need will not always be easy. All too often, bureaucrats and businesspeople speak past each other, the needs of the young are not the same as those of the elderly; the rhythms of the township differ from those of the suburb. Race, class and language differences interfere with progress, even when we have shared aspirations. We need to bridge these divides.”
*For more on the budget speech click here
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