Budget 2017: all you need to know

Minister of Finance Pravin Gordhan delivered the national budget in Parliament on 22 February 2017.

Gordhan warned South Africans of tough times ahead while addressing the National Assembly in his sixth Budget Speech.

He spoke about the introduction of a new tax bracket for the rich earning R1.5 million and higher, touched on the growing state debt as well as some of the economic indicators that put our fiscal numbers at a lower rate than the budget last year.

He also indicated that our growth has been too slow – just 1 per cent a year in real per capita terms over the past 25 years. He highlighted government’s responsibility to the poor and the important of maintaining existing infrastructures instead always building new infrastructure.

The Treasury pointed out some key elements around the budget:

The proposed expenditure for 2017/18 totals R1.56 trillion and revenue totals R1.41 trillion.
Government debt will stabilise at about 48 per cent of GDP over the next three years.
Government’s wage bill has stabilised.
47.5 per cent of available funds are allocated to national government, 43.4 per cent to provinces and 9.1 per cent to local government.
The balance of R149 billion, or 3.1 per cent of GDP, will be borrowed
Government debt now stands at R2.2 trillion, or 50.7 per cent of GDP.

Gordhan introduced four game changers: Municipal standard charts of accounts – municipal finances, Target supply chain management systems, Revenue management – appropriate tariff settings and improved asset management.

Ater reaching 6.4% in 2016, consumer inflation is expected to decline to 5.7% in 2018.

Substantial additional allocation to higher education is again proposed, adding R5 billion to the R32 billion previous.
Spending on basic education next year will be over R240 billion, or 17.5 per cent of the consolidated budget.
Allocations for school building increase at 12.5 per cent a year.
Spending on learning and teaching support materials increases by 9.5 per cent over the next three years.

R3.9 billion has been allocated for small, medium and micro enterprises and cooperatives.
R1.5 billion fund to support small and medium enterprises has been established by private sector voluntarily.
Spending on agriculture, rural development and land reform amounting to nearly R30 billion by 2019/20.
The services sector was the main contributor to growth in 2016 bringing nearly 120 000 new work opportunities.
They have agreed to implement a minimum wage of R20 an hour with effect from next year.

An additional R28 billion will be raised in taxes.
The annual allowance for tax free savings accounts will be increased to R33 000.
A new top personal income tax rate of 45 per cent for those with taxable incomes above R1.5 million.
An increase in the dividend withholding tax rate from 15 per cent to 20 per cent.

Social Grants
Gordhan highlighted that income growth has been uneven with the bottom 20 per cent benefiting from social grants and better access to services.
The old age grant will increase by R90 to R1600 for pensioners over the age of 60, and R1620 for those over 75.
The child support grant increases by R20 to R380 a month.
The disability and care dependency grants also increase by R90 to R1600 a month.

R114bn for subsidised public housing.
Houses under R900 000.00 will not attract transfer tax.

Fuel, sin tax and VAT
Increases in the excise duties for alcohol and tobacco, of between 6 per cent and 10 per cent.
The fuel levy will rise of 30 cents per litre.
A revised Carbon Tax Bill will be published for public consultation and tabling in Parliament by mid-2017.
Further consultations are currently taking place on the tax on sugary beverages.
The rate will be 2.1c per gram for sugar content above 4g per 100 ml.

Source: www.albertonrecord.co.za

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