OWN CORRESPONDENT, Cape Town | Wednesday
PRESENTING the 2001/02 Budget in Parliament, Finance Minister Trevor Manuel said taxpayers would begin to taste the fruit of sacrifices, as the government shifted its focus to encourage growth and investment.
“This Budget tells the story of the choices and decisions we have made and which have advanced the transformation of our country and its economy to the point where we can now begin to enjoy the fruit,” he said.
“It tells the story of a young and proud democracy hard at work to improve the lives of all its people.”
This Budget is estimated at 2.5% of gross domestic product this year, to 2.1% in three years. The deficit will be financed mainly through proceeds from the restructuring of state assets.
The Budget provides for spending of R258.3bn in 2001/02, to R297.5bn in 2003/04 and revenue rising from R233.4bn to R273.1bn over the same period.
Through the adjustment of tax brackets, an taxpayers will receive an extra R8.3bn.
The marginal tax rate remains unchanged at 42%, but the primary and secondary rebates will be increased from R3 800 and R2 900 to R4 140 and R3 000 respectively. People earning less than R23 000 per year will not pay income tax.
Manuel deferred implementation of the controversial capital gains tax from April 1 to October 1. He said this would allow businesses to amend their management information systems to ensure effective implementation.
Fulfilling the Black Sash organisation’s wish, Manuel pledged an extra R500m for final reparations to victims of gross human rights abuses.
This brings the total amount set aside for reparations to R800m.
An hour before Manuel was due to deliver his speech members of the Black Sash participated in a placard demonstration on the steps of St Mary’s Cathedral outside Parliament. Black Sash trustee Betty Davenport said: the people concerned have been waiting now for many years for practical assistance to help them heal from the ravages of apartheid… further delay is simply not justifiable”.
Manuel said allocations to the President’s Fund on the justice and constitutional development vote for 2001/02 and 2002/03 would bring the amount available for final reparations to about R800m. These would be paid in once-off settlements.
Smokers and tipplers received their customary bad news, with prices of cigarettes, beer and other alcoholic beverages to rise significantly.
Beer and cider taxes increase by six percent, or 2,3 cents a can, in line with inflation. Duties on all other alcoholic beverages are raised by 10%. Taxes on tobacco products are raised by between 11,8 and 20,2%, to maintain the 50% tax rate on these products. The price of a packet of 20 cigarettes thus rises by 33,8 cents.
Manuel said these measures would raise estimated revenue by R779-million.
Farmers are to benefit from a diesel concession which will reduce the price by 25.6c a litre.
Manuel also announced the governments intention to create jobs through infrastructure spending. The provinces will receive R16bn over the next three years for social service delivery and other priorities, road construction and maintenance, school buildings, hospitals, clinics and rural development.
National infrastructure spending will focus on police stations, courts and prisons, water supply and sanitation, infrastructure in support of industrial development, refurbishment of trains, completion of the Lubombo road linking northern KwaZulu-Natal, Swaziland and Mozambique, and the development of emergency call centres.
The government has budgeted more than R4bn in the criminal justice sector for increased personnel, improved police salaries and additional vehicles.
ZA*NOW:
Budget likely to chart growth path February 21, 2001