2008 Budget highlights - Trevor Manuel - South Africa
The economy and fiscal stance:
• GDP growth of 5 per cent in 2007, with growth averaging about 4.3 per cent a year over the forecast period.
• CPIX inflation rising to 7.1 per cent in 2008 before declining to 4.9 per cent in 2009.
• Gross fixed capital formation projected to rise from 21 per cent of GDP in 2007 to 24 per cent in 2010.
• Estimated consolidated national budget surpluses of 1 per cent in 2007/08 and 0.8 per cent in 2008/09, with projected surpluses over the three-year period.
• Real growth in consolidated government non-interest expenditure of 6.1 per cent a year over the MTEF.
• Government contribution to national savings projected to rise from 0.8 per cent of GDP in 2006/07 to 1.5 per cent in 2010/11.
• R60 billion to support Eskom’s capital financing requirements over the next five years.
• Total tax relief for individuals of R7.7 billion.
• Reduction in the corporate income tax rate from 29 per cent to 28 per cent.
• A simplified tax regime for small businesses.
• R5 billion in tax subsidies over the next three years for labour-intensive industries and industrial policy.
• An electricity levy of 2 cents per kilowatt hour.
• Fuel (petrol and diesel) taxes to increase, from 2 April 2008, by 11 cents per litre.
• A packet of 20 cigarettes will cost 66 cents more.
• A 750 ml bottle of wine will cost 12 cents more.
• A 340 ml can of beer will cost 5 cents more.
• A 750 ml bottle of liquor (spirits) will cost R2.17 more.
Spending on public services Additions to spending over the next three years:
• R33.2 billion for provinces mainly for school education, health care, welfare services and roads.
• R6.5 billion to municipalities for the extension of free basic services.
• R12.5 billion for social grants, including extension of the child support grant to children up to their 15th birthday in 2009 and lowering of the age of eligibility for men to receive the old age pension to 60.
• R9 billion in conditional grants for school building, HIV and Aids, hospital revitalisation and school nutrition.
• R8.2 billion for public transport, roads and railway infrastructure.
• R6 billion for housing, water and general built environment infrastructure.
• R2 billion for 2010 FIFA World Cup Stadiums and related infrastructure.
• R2.5 billion for industrial development and small, medium and micro enterprises.
• R2.6 billion for agriculture and land reform.
• R2.7 billion for information technology network infrastructure, police forensic laboratories and additional police personnel, and R2 billion for correctional facilities.
• R1.4 billion for higher education, research and knowledge development.
• R1 billion for programmes under the expanded public works umbrella.