2013 Budget highlights

Posted 27 February 2013 Written by Ciaran Ryan
Category Financial and Accounting

Finance minister Pravin Gordhan’s 2013 Budget proposals make modest concessions to demands for austerity while continuing to service the growing demands for social welfare. There’s R7 billion in relief for personal income tax payers to compensate for fiscal drag, the usual increases in taxes on cigarettes and alcohol, and some relief for small businesses.

Here are the highlights:

  • Consolidated government expenditure is budgeted to increase by 8.1% a year, from R1.1 trillion in 2012/13 to R1.3 trillion in 2015/16.
  • Job creation and labour: allocations for employment programmes increase by 13.5% a year over the next three years. There will be higher funding for employment projects of non-governmental organisations and for Working for Fisheries. The expanded public works programme aims to support 684,800 full-time equivalent jobs in 2013/14. Additional allocations are also made for the sheltered employment factories of the Department of Labour, and to support the work of the Commission for Conciliation, Mediation and Arbitration.
  • Health and social protection will receive R268 billion in 2013/14. “Health infrastructure remains a priority,” said Gordhan. In 2012, a total of 1,967 health facilities and 49 nursing colleges were in different stages of planning, construction and refurbishment. Substantial improvements in the social assistance payments system are in progress, providing easier access by recipients to their grants. The cost of social grants payments has been reduced from R32 to R16 per disbursement.
  • Education, sport and culture will get R233 billion in 2013/14. “Over the period ahead, the basic education sector will focus on improving numeracy and literacy, expanding enrolment in grade R and reducing school infrastructure backlogs,” added Gordhan. Together with the broader education infrastructure grant, R23.9 billion is available to provincial education departments for infrastructure over the next three years. A total of R700 million has been allocated for the technical secondary schools recapitalisation grant. This will finance construction and refurbishment of 259 workshops and training of over 1,500 technology teachers.
  • Transfers to higher education institutions increase from R20.4 billion in 2012/13 to R24.6 billion in 2015/16. The total number of students enrolled in higher education institutions is expected to increase from 910,000 currently to 990,000 in 2015. Funding has been allocated for the construction of new universities in the Northern Cape and Mpumalanga to commence this year.
  • Economic services is to get R48 billion, including R5.3 billion for the manufacturing competiveness enhancement programme and R2.9 billion for special economic zones. Additional allocations include R450 million over three years to the Economic Development Department for the Small Enterprise Finance Agency. The Department of Agriculture, Forestry and Fisheries will continue its support for smallholder farmers. Additional funding goes to the Department of Mineral Resources to support beneficiation and rehabilitate derelict and ownerless mines.
  • Transport, energy and communications: expenditure on transport, energy and communications will amount to R89 billion next year. The allocation to the Department of Transport increases from R42.3 billion next year to R53.4 billion in 2015/16, reflecting increased allocations to the Passenger Rail Agency for its rolling stock procurement programme and further investment in the national road network. Additional funding goes to integrated public transport networks in urban areas, and for provincial road maintenance.
  • The integrated national electrification grant is allocated additional funding to increase the number of new electricity connections by 645,000 over the next three years. The solar water geyser programme will be continued until 2015/16 and Sentech will receive R599 million over the medium term for the migration from analogue to digital terrestrial television.
  • Local government, community amenities and housing has been allocated R132 billion in 2013/14.  The largest increases go to bulk water, water treatment and water distribution projects, and allocations to the local government equitable share.
  • R4.3 billion is allocated to a new grant to be administered by the Department of Water Affairs, providing for water treatment, distribution, demand management and support for rural municipalities. The Municipal Infrastructure Support Agency of the Department for Cooperative Governance receives R820 million to provide technical assistance to rural and low-capacity municipalities.
  • Funding for improving human settlements will grow from R26.2 billion to R30.5 billion over the next  three years, including R1.1 billion to support the informal settlement upgrading programme  in mining towns. Social housing receives an additional allocation of R685 million.
  • The general public services function is allocated R57 billion in 2013/14. This includes the SARS budget of R9.5 billion, which is just over 1% of revenue to be collected. 
  • The Department of Public Works is to reprioritise R464 million over the medium term to fund its turnaround strategy, which focuses on lease and property management portfolios. The Public Service Commission receives R71.4 million to combat corruption and address grievances. 
  • The Department of Home Affairs will spend R1 billion on its information systems modernisation programme, which has already led to substantial reductions in the time required to produce official documents. 
  • The allocations for defence, public order and safety amount to R154 billion in 2013/14.  Provision is made for peace-keeping operations in the Central African Republic, where 400 defence force personnel have been deployed. 
  • The Department of Police has reprioritised R2.5 billion to improve detective and forensic capability. The Department of Justice and Constitutional Development receives R1.2 billion for the criminal justice sector revamp and modernisation programme. There is increased funding allocated to the National Prosecuting Authority for the Thuthuzela Care Centres. The Public Protector of South Africa receives funding to increase its investigative capacity and additional funds are also made to Legal Aid South Africa and the South African Human Rights Commission. 

 

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