Spending by the South African government is expected to total R5.9 trillion over a three-year period, growing at an annual average of 7. 8 percent per year.
The Medium Term Budget Policy Statement (MTBPS) presented in Parliament on Wednesday by Finance Minister Tito Mboweni outlines that government funding remains focused on ensuring access to health and education, supporting low-income households through social grants, and providing basic services such as water and electricity.
But the expenditure ceiling remains unchanged from the 2018 budget.
“Of the R32.4 billion of expenditure reprioritised over the medium term, R15.9 billion goes towards faster-spending infrastructure programmes, clothing, and textile incentives, and job creation under the Expanded Public Works Programme,” the statement reads
National Treasury said the reprioritisation takes into account President Cyril Ramaphosa’s economic stimulus and recovery plan announced in September.
“The public service wage bill constitutes the largest share of government expenditure by economic classification, crowding out another spending. The wage agreement reached in 2018 adds to these pressures.”
Meanwhile, Mboweni also announced further bail-outs for some State Owned Enterprises.
He gave South African Airways a cash injection of R5bn “to enable the struggling national carrier to settle its debts”.
South African Airways Express, which had its aircraft grounded in May because it was unable to perform proper maintenance, will get R1.249 billion.
The South African Post Office has been allocated R2.9 billion for its recapitalisation.
He also said that value-added tax (VAT) on white bread flour, white cake flour, and sanitary pads will be zero-rated from 1 April next year.
"The revenue loss associated with zero-rating these items is estimated at R1.2 billion.
However, zero-rating these products target low-income households and restore the dignity of our people," Mboweni said.
- African News Agency (ANA)
