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28 February 2014
Minister of Finance Pravin Gordhan delivered the 2014 Budget Speech in Cape Town.
There were no major announcements in Minister Pravin Gordhan's 2014 Budget, but there was a word of caution that South Africa needs to "live and spend modestly."
Tabling his 2014/15 budget in the National Assembly, he said government recognised the need to protect and improve the financial well-being of households, to make them less vulnerable to a sudden loss of income in bad times.
Agreement had been reached with the Association of Savings and Investment of SA on a way forward to reduce the level of charges for retirement savings products. Draft regulatory reforms would be published shortly, Gordhan said.
BUDGET FRAMEWORK:
- Budget deficit of four percent of GDP expected for 2013/14, narrowing to 2.8 percent in 2016/17;
- Debt stock as percentage of GDP to stabilise at 44.3 percent in 2016/17;
- Tax revenue for 2013/14 expected to be R1 billion higher than projected in 2013 budget;
- Real growth in non-interest spending to average 1.9 percent over next three years,
- National and provincial government expenditure on travel, catering, consultants and other administrative payments declines as a share of spending;
- Expenditure ceiling commits government to spending limits of R1.03trn in 2014/15, R1.11trn in 2015/16 and R1.18trn in 2016/17.
SPENDING PROGRAMMES:
Over the next three years, government will spend:
- R410bn on social grants;
- R15.2bn on the economic competitiveness and support package;
- R8.5bn on the Community Work Programme;
- R8.7bn on settlement of land restitution claims;
- R7bn for subsistence and smallholder farmers;
- R78bn on university subsidies and R19.4bn for the National Student Financial Aid Scheme;
- R34.3bn on school infrastructure;
- R22.9bn to upgrade commuter rail services;
- R143.8bn to support municipal infrastructure;
- R42bn on the HIV and Aids conditional grant.
TAX PROPOSALS:
- Personal income tax relief of R9.3bn;
- Adjustments to tax tables relating to retirement lump-sum payments. The tax-free, lump-sum amount paid out of retirement funds would be increased from R315,000 to R500,000;
- Measures to encourage small enterprise development;
- Clarity on valuation of company cars for fringe-benefit tax purposes;
- Reforms to tax treatment of the risk business of long-term insurers;
- Amending rules for VAT input tax to combat gold smuggling;
- Measures to address acid mine drainage;
- Adjustment of the proposed carbon tax and its alignment with desired emission-reduction outcomes identified by the environmental affairs department.
Further information on the 2014 National Budget |
