SA lifts spending to tackle poverty, health

South Africa will spend an extra R112-billion over the next three years as it tackles poverty, boosts job creation and fights Aids Finance Minister Pravin Gordhan said on Wednesday.

Africa’s biggest economy emerged from its first recession in 17 years in the third quarter last year and government has ramped up spending to counter huge job losses and spur recovery, especially in the manufacturing sector.

“In total we are able to add R112-billion to the baselines of departmental budgets,” Gordhan said in his first budget speech since being appointed by President Jacob Zuma nine months ago.

“Of these amounts, over half go to provinces and municipalities for education, health, municipal infrastructure and human settlements, reflecting our commitment to sustaining growth in spending on our key priorities,” he said.

The ANC-led government has faced a barrage of criticism, mainly from its trade union and communist allies, that it has not fulfilled promises to improve the lives of millions of black South Africans who still face grinding poverty 16 years after apartheid ended.

Despite spending in cities and towns rising strongly the past five years, frequent protests over a lack of water, sanitation and electricity in townships has highlighted the plight of the poor—the ANC’s main constituency.

“We are working to resolve these problems, to improve financial management and to ensure that higher spending translates into real improvements in people’s lives,” Gordhan said.

Job creation key
He said R52-billion would be available over the next three years to support an expanded public works programme aimed at creating 4,5-million short-term job opportunities between 2009 and 2014.

Creating quality jobs is a major concern for the government after the loss of 900 000 jobs last year. According to national treasury data, the jobless rate hit 24,3%, the highest in five years.

Government wants to raise employment of young school-leavers by a further 500 000 by 2013, and has been mulling a cash reimbursement scheme to employers for a two-year period to help lower the cost of hiring inexperienced youngsters.

“An additional R3,6-billion is allocated for industrial policy interventions. In particular, these funds go to support investment and production in the automotive components and clothing and textile industries,” Gordhan said.

Details of the new labour-intensive industrial policy action plan will be released on Thursday.

Social security
Government will also expand its social-security net, with R89-billion earmarked for spending in 2010/11, in part to accommodate a phased extension in the child-support grant up to a child’s 18th birthday.

Gordhan said another R8,4-billion would be spent over three years boosting antiretroviral HIV/Aids treatments in South Africa, which has one of the world’s highest caseloads and where an estimated 1 000 people die of Aids complications each day.
- Reuters

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