Budget speech: Nene admits fault-lines across social landscape

Finance Minister Nhlanhla Nene.

Nene said, “We have built houses, delivered water and electricity, improved access to schools and health, but yet there are people living in shacks, there are schools without sanitation and there are patients without care.” He also acknowledged that unemployment remained one of the greatest economic and social challenges.

“Government continues to prioritise measures aimed at generating employment. These include tax incentives for employment, investment, support for enterprise development, skills development and employment programmes.” He stated that R10.2 billion had been allocated over the Medium Term Expenditure Framework period, to manufacturing development incentives and support for growing service industries such as business process outsourcing.

He said expenditure on health and social protection would continue to grow, as health spending would reach R178 billion in 2017/18. Nene said more than R640 billion would be allocated to basic education over the next three years. The number of qualified teachers entering the public service was projected to increase from 8 227 in 2012/13 to 10 200 in 2017/18.

“To support teacher training, R3.1 billion will be awarded in Funza Lushaka bursaries over the next three years,” Nene said. Allocations to post-school education and training will exceed R195 billion over the medium term, increasing at an annual average of 7.1 percent.

He said the budget’s tax proposals aimed to increase tax revenues as required, limit the erosion of the corporate tax base, increase incentives for small businesses, and promote a greener economy.

Liquor consumers and smokers were advised that excise duties on alcoholic beverages and tobacco products would increase. There was a proposed temporary increase in the electricity levy from 3.5 cents/kWh to 5.5 cents/kWh, which would be withdrawn when the electricity shortage was over.

Nene announced that there would be a R25 billion reduction in the main budget expenditure ceiling over the next two years, and an increase in taxes amounting to R17 billion for the 2015/16 period. There would also be revised spending plans across the whole of government aimed at greater efficiency.

The increase on alcohol and cigarettes is as follows:

  • The tax on a quart of beer goes up by 15 and a half cents
  • A bottle of wine will cost 15 cents more
  • A bottle of sparkling wine goes up by 48 cents
  • A bottle of whisky will cost R3.77 more
  • A pack of 20 cigarettes goes up by 82 cents.
Aphiwe Boyce
Metro Reporter

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