1.No personal income tax or VAT increase
Treasury believes tax increases would have been counter-productive in the current economic climate. In fact, VAT collections have fallen since the rate increase to 15% two years ago.
Government has committed to inject R23bn annually into Eskom for the following seven years. However, over the next three years Eskom will be given R112bn instead of the budgeted R69bn. SAA will receive R16.4bn in the next three years
3.Debt servicing remains a concern
15% of total revenue received currently goes towards paying interest on debts.
4.Public sector wage bill
Treasury is budgeting for a R160bn reduction. The public sector wage bill has increased 40% in real terms over the past 12 years “without equivalent increases in productivity.” The unions warned against this before the speech and have responded with contempt after. This is by no means a done deal!
5.Road Accident Fund
Despite the injection of a further 9c a litre (from the overall 25c/l increase in fuel prices) the RAF’s liabilities are forecast to exceed R600bn by 2022/23. To address this, one of the options being considered is the introduction of compulsory third-party insurance. The petrol levy will increase by 25c/l.
6.Transfer duties removed for home purchases under R1mn
Good for first time buyers and people buying at the lower end of the market.
The largest budget items will be Learning and Culture (R396bn), Health (R230bn), and Social Development (R310bn). However, public transport spending to be cut by R13.2bn over the next three years, largely due to consistent underspending by Prasa.
8.The war against crime
The National Prosecuting Authority (NPA), the Special Investigating Unit (SIU) and Directorate for Priority Crime Investigation to receive an additional R2.4bn. This will enable the appointment of approximately 800 investigators and 277 prosecutors.
The almost mandatory annual duty increases on alcohol and tobacco products continues, albeit below inflation this year. A new category for heated tobacco products will be introduced, targeting things like e-cigarettes and even hubbly bubbly!
Not a word on subject. Not a good omen for Gauteng motorists!