He started off with some major concerns that the country is facing, stating that low growth, the high unemployment rate, extreme inequality and hurtful fractures in society are unacceptable.
“All of us want jobs, thriving businesses, engaged professionals, narrowing inequality, fewer in poverty,” said Gordhan.
“We want our government to function effectively, our people to work in dignity with resources for their families, decent homes and opportunities for our children.”
The government’s plan is to:
- Manage finances in a prudent and sustainable way.
- Re-ignite confidence and mobilise the resources of all social partners.
- Collectively invest more in infrastructure to increase potential growth.
- Give hope to the youth through training and economic opportunities.
- Protect South Africans from the effects of the drought.
- Continuously improve education and health systems.
- Accelerate transformation towards an inclusive economy.
- Strengthen social solidarity and extend the social safety net.
“The budget relies on institutions of good governance and a public ethic that values honesty and fairness.”
Gordhan stated that what South Africans do well and have clear views on are tax administration and paying social grants.
“What we should stop doing are corruption and waste.”
- Energy investment will be more than R180-billion over the next three years, as construction of the Medupi, Kusile and Ingula power plants is completed.
- Transport and logistics infrastructure accounts for nearly R292-b over the next three years.
- Transnet is acquiring 232 diesel locomotives for its general freight business and 100 locomotives for its coal lines.
- R30-b for provincial roads maintenance.
- R18-b for bus rapid transit projects in cities.
- Refurbishment of more than 1 700 Metrorail and Shosholoza Meyl coaches.
- R62-b is allocated for housing subsidy programmes.
- R34-b for bulk infrastructure and residential services in metropolitan municipalities.
- R28-b will be spent on the Medium Term Expenditure Framework (MTEF) on improving health facilities.
- R54-b on education infrastructure.
Gordhan stated that the government’s tax proposal are personal income tax relief of R5.5-b, which partially compensates for inflation and focuses mainly on lower- and middle-income earners.
There is to be an increase in the monthly medical tax credit allowances, as well as an increase of 30c a litre in the general fuel levy.
He also introduced a tyre levy to finance recycling programmes and announced increases in the incandescent globe tax as well as the plastic bag levy and the motor vehicle emissions tax.
“For those of you who like fizzy drinks, an introduction of tax on sugar sweetened beverages.”
Duties on alcoholic beverages and tobacco products will see an increase of between 6% and 8.5%.
Gordhan assured government employees that reform of the retirement system would not affect their accrued pension rights.
The investment portfolio of the Government Employees’ Pension Fund (GEPF) grew by 12.2% to R1.6-trillion.
GEPF pensioners will receive a 5.3% increase in April.
Higher education
An additional R16.3-b has been allocated for higher education over the next three years.
R5.7-b of the amount addresses the shortfall caused by keeping fees for this academic year at 2015 levels, R2.5-b goes to the National Student Financial Aid Scheme to clear outstanding student debt, along with a further R8-b over the medium term to enable current students to complete their studies.
Basic education
Expenditure on basic education will increase from R204-b to R254-b in 2018/19.
“By 2018, 510 inappropriate and unsafe schools will be rebuilt, 1 120 schools will be supplied with water and 916 schools with electricity,” Gordhan stated.
Health and welfare services
R4.5-b is budgeted over the medium term for revitalising health facilities, an additional R740-million has been allocated to strengthen TB programmes to encourage early detection and treatment, and R1 billion for expansion of the antiretroviral treatment programme.
Social grant increases
Overall expenditure on social assistance will increase from R129-b to R165-b in 2018/19.
The old age, disability and care dependency grants will rise by R80 to R1 500 in April and by a further R10 to R1 510 in October.
The child support grant will rise by R20 to R350 in April and the foster care grant by R30 to R890.
The number of municipalities will be reduced from 278 to 257, with the objective of improving their viability and sustainability.
Local government allocations will be revised to take account of these boundary changes and more than R400-m is allocated over the next two years to assist with the transition.
The ‘Back to Basics’ programme launched in 2014, aimed at improving service delivery performance of municipalities, is entering its second phase of implementation and involves active monitoring of performance in governance and service delivery as well as support to struggling municipalities and stronger accountability measures.
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