Budget Speech 2013
Looking back on the path we have travelled since 1994, we see the importance of a long-term perspective on development and change. It is people acting together for a common vision that connects the past to the present, and makes a better future possible. The challenge for us, honourable members, is that people are asking if we can sustain our “miracle”. They are asking whether we as a nation have the ability, the will and the wisdom to take another leap forward in reconstructing and developing
The 2013 Budget takes the National Development Plan as its point of departure. The strategic plans of government and the medium-term expenditure plans will be aligned to realise our objectives.Government has taken measures to control growth in spending. Spending plans have been reduced by R10.4 billion through reprioritisation, savings and a draw-down on the contingency reserve.Government remains committed to a large-scale infrastructure investment programme.
Our path of spending and the recovery in revenue will stabilise debt at just higher than 40 per cent of
in supporting the objectives of inclusive growth, employment, development and fiscal sustainability.In the 2013/14 fiscal year, personal income tax relief of R7 billion is granted.
A new local government equitable share formula is proposed, providing a subsidy for free basic services designed to reach 59 per cent of households.Further education and training will continue to be extended and enhanced. And following careful consideration of inputs from various stakeholders,a revised youth employment incentive will be tabled in the House,
together with a proposed employment incentive for special economic zones. In this budget we continue to invest in education, health, housing, public transport and social development – components of the social wage which add up to about 60 per cent of public expenditure.
improve education, training and work opportunities for young people.
A third imperative is economic competitiveness. We need to invest in infrastructure, raise productivity and diversify our economy, to create jobs and raise living standards. Improving the quality of education and training is an essential foundation of a more productive and inclusive growth path. Stronger links with Africa and other emerging economies are needed.
We have to adapt to a low-carbon economy, including mobilisation of our renewable energy potential.
Finally there is the social solidarity challenge that cuts across all of these, which is to build a more equal and inclusive economy that bridges our racial and other divides. These are themes on which the NDP provides clear guidance, not just about strategic goals and objectives, but also about the practical difficulties and choices we face. There are substantial strengths on which to build – a well-established legal system, secure property rights, an effective tax system, world-class higher education institutions and science councils, established energy, transport, water and communications infrastructure networks, expertise and capacity in many areas - mining, construction, retail, finance, logistics and manufactured exports – and a sound macroeconomic and fiscal framework.
Capital expenditure of R3.4 billion over the next three years by a rail and logistics operator.
A R2.5 billion expansion and longer-term plans of R15 billion in mining projects
The Manufacturing Competitiveness Enhancement Programme (MCEP), announced in 2012, has received a total of 215 applications with requests for grants totalling R2.3 billion mainly from the chemicals, metals and agro-processing sectors. Applications are expected to increase over the period ahead and funding of R1.5 billion per year has been provided on the budget of the Department of Trade and Industry.
Small, Medium and Micro Enterprises (SMMEs) play a key role in the development of the economy and are a significant generator of employment. Financing of SMMEs has been simplified with the creation of the Small Enterprise Finance Agency last year. We have been
To further support the private sector in expanding operations in Africa, I will announce simpler rules that will reduce the time and costs of doing business in Africa. A number of measures are proposed to relax cross-border financial regulations and tax requirements on companies, making it easier for banks and other financial institutions to invest and operate in other countries. Similar measures will apply to foreign companies wanting to invest in African countries using South Africa as their regional headquarters. The outward investment reforms that apply as part of the Gateway to Africa reforms will also pertain to those companies seeking to invest in countries outside Africa, including BRIC countries.
Work is underway on creating a trade and development insurance risk pool. The aim is to establish a sustainable and alternative insurance and reinsurance network for the BRICS countries.
As a citizen one should be able to obtain from the treasury website at the end of each financial year what amount was spent on what infrastructure.” Mr du Preez, you
can already obtain that information from the treasury website, not just every year, but every month!
To ensure that South Africa produces fuel that is more environmentally friendly, support mechanisms for both biofuel production and the upgrade of oil refineries to cleaner fuel standards will be introduced. In addition, government continues to direct spending towards environmental programmes, such as installing solar water geysers, procuring renewable
eligible workers of all ages within special economic zones.
The Budget Review outlines various measures proposed to protect the tax base and limit the scope for tax leakage and avoidance. The taxation of trusts will come under review to control abuse; modifications are proposed to the tax treatment of employment share schemes and disability or income-protection policies; outstanding difficulties in the distinction between debt and equity will be addressed; and it is proposed that foreign businesses which sell e-books, music and other digital goods and services should be required to register as VAT vendors, in line with regulations which have been adopted by the European Union and other jurisdictions.
multinational companies that pay little or no tax in the countries in which they operate. Meeting in Moscow earlier this month, finance ministers of the G20 countries were united in supporting an overhaul of international company tax rules to address this issue. The South African Revenue Service is currently engaging with companies that have their base of operations in SA but appear to have shifted a large proportion of their profits to low tax jurisdictions where only a few people are employed. This is unacceptable!
Voluntary disclosure. A temporary voluntary disclosure programme was implemented under legislation enacted in 2010 which allowed taxpayers in default to regularise their tax affairs. More than 18 000 taxpayers made use of the programme and tax of more than R3 billion has so far been collected as a result of the programme. From 1 October 2012, a permanent voluntary disclosure programme became effective as part of the Tax Administration Act (2011). Some 700 taxpayers have already come forward. Tax of more than R200 million will be collected before the end of March 2013.
In the past, we have been able to add substantially to medium term spending plans during the Budget, but this year is different. Money has been taken away from programmes that are not performing or are not aligned to government’s core priorities and given to programmes that are delivering as planned. The main appropriation provides for R1 055 billion in expenditure next year, rising to R1 226 billion in 2015/16. Debt-service costs will come to R100 billion next year, and R4 billion is set aside as a contingency reserve. This leaves R951 billion to be divided between the national, provincial and local spheres.
The Chair of the Land Bank, Mr Ngubane, and CEO Mr Phakamani Hadebe, for their illustrious service to the bank, The leadership of the Public Investment Corporation, the Financial Services Board, the Financial Intelligence Centre and the Government Pension Administration Agency, The managing director of NEDLAC, Mr Alistair Smith, and the
constituency representatives for their engagements with the Treasury, The Honourable Thaba Mufamadi and Charel de Beer, who chair the Standing and Select Committees on Finance respectively, and the chairpersons of the the Appropriations Committees, the Honourable Elliot Sogoni and Tebogo Chaane, who ensure that Parliament remains a vibrant forum for engagement, accountability and public participation,
The key pillars of this Budget are: Global growth is improving, though uncertainty remains.