Tuesday, October 27, 2009

Mini-Budget in a nutshell

All the major changes in Minister Pravin Gordhan's Medium-Term Budget Policy Statement 2009.

Exchange controls and associated red tape to be relaxed. Limit for individuals raised to R4m.
•Growth of 1.5% expected for South Africa in 2010, rising to 3.2% in 2012.
Creating jobs, particularly among millions of relatively unskilled South Africans, is the country's greatest economic challenge.
•Nearly half a million South Africans have been retrenched over the past year and Unemployment Insurance Fund claims doubled in the year to April 09.
•Government considers establishing an industrial development and job creation fund.
•More than 13m people now receive social grants.
•By March 2010, 900 000 people will be receiving antiretroviral treatment.
•National Treasury and the Reserve Bank to focus on low inflation and a more stable and competitive real exchange rate.
Tax revenue is down sharply as a result of the recession.
•Sars to increase penalties on non-payers to ensure "fairness".
•Policy aims to encourage a recovery without burdening future generations with unsustainable debt
•Mining displayed the first signs of recovery, with production rising strongly in the six months to August.
•Lower interest rates and falling inflation are expected over the period ahead.
•Eskom tariff increases will be required to align the price of electricity with the cost of generation.
•The current-account deficit is projected to increase to 5.7% in 2010.
•Government needs other forms of revenue. Proposals include broadening the tax base, improving tax compliance and the introduction of new taxes.
•South Africa is falling short of its commitments by failing to meet the "legitimate" service expectations of its people.
•Departments need to reduce expenditure on low-priority and non-essential items. Total net savings of R14.5bn at national level and R12.6bn at provincial level have been identified over three years for prioritisation.
•Cost cutting examples include catering, communication, consultants, inventory, stationery and printing, travel and subsistence, accommodation and entertainment.
•An additional 22 500 police personnel to be recruited by 2012/13. Special investigators for priority crime to increase from 350 to 2 400 in same period.

2 Opinion(s):

Anonymous said...

I'm no finance person but the budget seems to be pretty balanced. Let's watch the black man stuff this one up...again. Just like Zuma said he'd create 500 000 jobs when in fact he meant lose 500 000 jobs - minor oversight.

Anonymous said...

I wonder why they have relaxed exchange controls? To stimulate trade or to allow the wealthy to get their money out before the country collapses?