2013 Budget in comparison to 2012

Mluleki Mrwebi
27 February 2013

Finance Minister Pravin Gordhan today tabled the budget speech for 2013/14 financial year.

The Minister reiterated President Jacob Zuma`s words, during the State of Nation Address, when he said all citizens should put South Africa first.

Gordhan during the 2012 budget pointed out that global economic uncertainty will remain and South Africa’s economy is improving but requires that we actively pursue a different trajectory if we are to address the challenges ahead.

He referred to the National Development Plan as the new trajectory that can shift South Africa towards economic growth and job creation.

This year’s budget brought a lot of changes from social grants, education, health, transport and infrastructure, job creation and funding for small businesses.

The old age grant, disability grant and care dependency grant received an increase of R60, taking them to R 1 260, from R1200 in the previous year.

Education, sports and culture was allocated about R233 billion in 2013/14 financial year, in 2012/13 financial year R 221 billion was allocated, this aimed at working towards improving numeracy, literacy programmes also increase enrolment in grade R and reduce school infrastructure backlogs. The non-delivery of textbooks in some schools and vandalism in schools has forced the increase in the allocation.

About R700 million has been allocated for the refurbishment of 259 workshops and training of over 1 500 technology teachers.

Gordhan said work has already begun in the refurbishment of teacher training colleges in Limpopo, Mpumalanga and the Eastern Cape.

Minister said Health infrastructure remains a priority, in 2012 a total 1 967 health facilities and 29 nursing colleges were in different stages of planning, construction and refurbishment. The Health and Social Protection was allocated R268 billion, in 2013/14 compared to R 251 billion in 2012/13.

Local Government and Housing was allocated R 132 billion, to improve human settlements living conditions and ensure adequate water supply is achieved.

Transport was allocated R 74,6 billion spread over a period of three years, for construction of new roads, improving the transport system and repairing of roads after the floods in places such as Kwazulu Natal, Limpopo and the Eastern Cape.

Minister said there will be higher funding projects of non-governmental organisation and for working for fisheries, also the expanded Public Works programme aims to support 684 800 fulltime equivalent job sin 2013/14, the allocation for employment will increase by 13,5 % over the next three years. Such an increase might bring some relief to the department that was the hardest hit by wage disputes in 2012, from mining sector to the agricultural sector that led to the new wage deal for farmworkers being R105 per day.

Minister said the National Development Plan is at its point of departure, it recognises that medium-term plans are framed in the context of a long-term vision and strategy.

He further said it focuses on strengthening growth and employment creation.

Ciders, beers and wines will have an increase of between 5 cents to 60 cents, while spirits will increase by R 3, 60 per bottle, Cigarettes will increase by 60 cents and pipe tobacco by 32 cents, Fuel prices will see an increase of 15 cents per litre, all these increases are expected to come into effect as from the 3^rd of April 2013.

Minister added that South Africa’s economy has continued to grow, but at a lower rate than projected at the time of 2012 budget. The GDP growth reached 2, 5 percent in 2012 and is expected to grow at 2, 7 percent in 2013, and rise to 3,8 percent in 2015.

Gordhan further said in recent times, the world has become more of uncertain for businesses, causing some to build cash reserves rather than invest in new or expand operations.

“Leading up to the budget, we engage with several business leaders on the investment and development challenges we face” said Gordhan.

He said expenditure on the economic services in 2013/14 will amount to R48 billion. In this funding there are additional allocations of R 450 million over a three period for the Economic Development Department for the Small Enterprise Finance Agency.

About R71,4 million has been set aside for the Public Service Commission to combat corruption and address grievances.

Gordhan said, he fully supports Minister Lindiwe Sisulu on her call to curb officials from doing business with government.

The Minister highlighted some of the main tax proposals that will be tabled in the National Assembly this year. Personal income tax relief of R 7 billion, together with adjustments to the medical tax credit amounting to about R 350million. The employment incentive through the tax system for first-time job seekers. The tax relief for small businesses. Government also plans to introduce carbon tax in 2015.

National Treasury Director General Lungisa Fuzile said the 2013 budget is about national development and fiscal sustainability. He also said both the country’s growth and fiscals are stable since 2012.

In this year’s budget there are no tax increases also the initial phase of the National Health Insurance will not place new revenue demands on the fiscus. However the Minister said it is anticipated that a tax increase will be needed over a long term.