Most aspects of Finance Minister Pravin Gordhan’s 2011/2012 budget, tabled in the National Assembly on Wednesday, were broadly welcomed by political parties.
The budget was about making South Africa work smarter, harder and differently, Gordhan told the Assembly.
For the poor, the budget expanded spending on housing, rural development, better community services and social assistance grants, he told the National Assembly.
For workers, it emphasised job creation and spending on the “social wage”, including access to health services, education, social security, transport and municipal infrastructure.
For the business sector, it expanded investment in modernising infrastructure and transport logistics, accelerating further education and skills development, and supporting research, technology and industrial investment.
For the small business sector, there were targeted financial and enterprise development programmes, as well as tax relief measures.
There was expanded access and financial assistance for further education, and a range of initiatives aimed at expanding job opportunities for the youth, Gordhan added.
Welfare, rather than development
The Congress of the People (Cope) welcomed many aspects, but lamented others.
“We welcome the emphasis on youth development and fully support the youth employment subsidy to hopefully create 178 000 jobs over the next three years,” spokesperson Nic Koornhof said.
The expanded access and financial assistance for further education was also welcomed.
On the other hand, Cope was unhappy about the rise in the deficit, and too much emphasis on a welfare state, rather than a developmental state, he said.
Lance Greyling of the Independent Democrats said, broadly speaking, the budget was welcomed as it prioritised the goal of job creation.
“We do, however, have concerns that it is in some instances entrusting the wrong institutions to create jobs.
“We certainly do not support the National Youth Development Agency receiving over a billion rand over the next three years as we don’t believe they can activate employment,” Greyling said.
Social services gains
The African Christian Democratic Party’s Steve Swart also “broadly” supported the budget.
He particularly welcomed the focus on economic growth, job creation and poverty alleviation, as well as details on increased spending on infrastructure development, health, education, fighting crime and corruption.
Earlier in his speech, Gordhan said real GDP growth was projected to reach 3,4% in 2011, 4.1% in 2012 and 4,4% in 2013.
Inflation was forecast to remain within the target range of 3% to 6%, edging towards the upper end of the range in 2013, as the economy strengthened.
Fiscal and monetary policy would continue to work in partnership.
On the taxation side, individuals would benefit from R8,1-billion in personal income tax relief.
Government and state-owned enterprises would spend more than R800-billion over the next three years on new power stations, road networks, dams and water supply pipelines, rail and ports facilities, schools, hospitals and government buildings, Gordhan said.
The bulk of the 2011/2012 consolidated budget of R979,3-billion (projected revenue R824,5-billion) went to social services — R577,3-billion.
Grants increase
The education budget rose by 9,7% to R189,5-billion, with the basic education allocation going up by 10,6% to R145,5-billion, and tertiary education by 6,8% to R26-billion.
Social protection followed with a budget of R146,9-billion, reflecting an increase of 10,7%; housing and community amenities R121,9-billion (up by 19,5%); and health received R112,6-billion (up by 9,8%).
The public order and safety budget allocation rose by 8,2% to R90,9-billion — police R60,7-billion (up 8,5%), prisons R16,5-billion (8,6%), and justice R13,7-billion (6,2%).
Transport got R65,6-billion (up 8,4%) and defence R38,4-billion (up 13,2%).
There was an unallocated contingency reserve of R4,1-billion.
The projected deficit of 5,3% was expected to drop to 4,8% in 2012/2013, and to 3,8% in 2013/2014.
With effect from April, the old age pension, disability and care dependency grants would increase by R60 a month, to R1 140.
Foster care grants rose by R30 to R740 a month, and the child support grant from R250 to R260 in April, and to R270 in October.
The budget proposed a range of measures to speed up job creation, including the R9-billion jobs fund, an allocation of R14-billion over three years for further education and training (FET) colleges, and R5-billion to the National Skills Fund, which had key responsibilities for training work-seekers. — Sapa