Pravin Gordhan, Minister of Finance. Photo: Matthew Jordaan. Pravin Gordhan, Minister of Finance. Photo: Matthew Jordaan.
Budget speech highlights:
- The total government budget for 2011/2012 is R979.3 billion, of which R65.6bn goes to transport; R76.6bn to service government debt; R90.9bn for the police, prisons and courts; R121bn for housing and community amenities; R112.6bn for health; R189.5bn for education; R146.9bn for social services; and R38.4bn for defence.
- Personal income tax relief of R8.1bn. The personal income tax threshold has been increased to R59 750 for people below the age of 65, R93 150 for those between 65 and 75 years, and R104 261 for people above the age of 75. R672bn in taxes were collected in 2010/2011, of which R380bn came from taxes on income and profits; R181bn from VAT; R24.8bn from excise duties; and R34bn from fuel levies.
- The social security bill goes up to R8.9bn as more than a quarter of the population now receives a government grant. The old age and disability grants go up R60 each to R1 140 a month (R1 160 for those over 75 years); the child support grant increases to R260 a month in April and R270 in October this year; war veterans grant goes up R60 to R1 160 per month; the foster care grant increases by R30 to R740; and the care dependency grant will be R270 a month.
- R1.8bn for municipalities and provinces to deal with immediate disaster relief and R600m for reconstruction following the floods earlier this year.
- R5bn over three years for a new Youth Employment Subsidy for workers aged 18 to 29. Other skills development spending includes R3.6bn more for the National Student Financial Aid Scheme; R14.3bn over three years for Further Education and Training colleges, including R5bn in bursaries for poor students; R3.1bn over three years for the National Skills Fund; and R300m for new universities in Mpumalanga and the Northern Cape.
- Government loan debt will rise from R526bn in 2010/2011 to R1.4tn in 2013/2014 and state departments have found savings of R30.6bn this year. Economic growth of 3.4% projected for 2011, increasing to 4.4% by 2013.
- Increase in the tax-free lump sum benefit upon retirement from R300 000 to R315 000.
- A packet of 20 cigarettes will cost 80c more; a 750ml bottle of liquor (spirits) will cost R2.73 more; a litre of sparkling wine goes up by 30c; a 340ml can of beer will now cost 1c more, but cider goes up by 6c.
- The fuel levy increases by 10c a liter. Gambling winnings above R25 000 will be taxed at 15%.
- Projected budget deficit of 5.3% for 2010/2011, declining to 4.8% in 2012/2013, and 3.8% in 2013/2014.
- Investment in infrastructure of R809bn over three years, including R93.7bn capital spending by Eskom, R21.9bn by Transnet, and R4.3bn by the Central Energy Fund. Power stations alone will cost R309bn.
- R9bn jobs fund to create 5m jobs over the next 10 years. - Political Bureau