What the numbers reveal
- Economic growth revised downwards from 1.5% to 0.7% for 2018.
- Consolidated budget deficit for 2018/19 revised to 4% of GDP (from 3.6%).
- After rising to 4.2% of GDP in 2019/20, it is expected to stabilise at 4% in outer years.
- Gross debt to stabilise at 59.6% of GDP in 2023/24 (February budget projection was 56.2% of GDP in 2021/22).
- Tax revenue for 2018/19 projected to fall R27.4 billion short of February estimate due to Vat refund backlog, underestimation of refunds and slower corporate income tax collections.
- Expenditure ceiling to be maintained and set to grow at 1.5% in 2021/22.
- No increases in personal income or corporates income tax rates or Vat expected, but personal income tax brackets, levies and excise duties to be adjusted for inflation.
- White bread flour, cake flour and sanitary pads to be zero-rated from April 1, 2019 at an estimated cost of R1.2 billion.
- Reforms under way at Sars to regularise Vat refund payments and rebuild capacity (reprioritisation of R1.4 billion of budget).
- Implementation of carbon tax postponed from January 1 to June 1, 2019.
- The Road Accident Fund will require further large increases to the fuel levy in each of the next three years.
- Public service wage agreement exceeds budgeted baselines by R30.2 billion over medium term. No additional money allocated, national and provincial departments to absorb costs within compensation baselines.
- Around 85% of increase in wage bill due to higher wages, rather than higher head count.
- SAA to receive R5 billion through special appropriation bill to settle debt redeeming between now and March 2019. This will help prevent call on airline’s outstanding government-debt of R16.4 billion.
- SA Post Office receives R2.9 billion to reduce debt levels.
- Sanral receives R5.8 billion to compensate for non-payment of e-tolls, of which R3 billion is an additional allocation.
- Reprioritisation of R350 million to recruit more than 2 000 health professionals into public health facilities.
- Minister says reconfiguration of SOEs required; parties should be “open-minded” and consider equity partner or close of certain business activities in SAA stable.
- New way of thinking required regarding public sector wage bill. Represents about 36% of budget, “sweet spot” is below 30%; public officials must also show restraint.
- Size of cabinet the prerogative of president, but should preferably not be more than 25, probably 20.
- Beneficial to involve private partners in health sector.
- Stabilisation of gross debt-to-GDP ratio close to 60% not a good development, “sweet spot” is below 50%.