#Budget2019 in a nutshell
Eskom (and other SOEs)
- Government not taking on Eskom's debt
- Setting aside R23 billion a year to support Eskom during its "reconfiguration"
- Support conditional on appointment of a chief reorganisation officer (CRO)
- Finance minister Tito Mboweni likens reorganisation to "curatorship"
- Mboweni: The president is right when he says Eskom will not be privatised
- Contingency reserves revised upwards to R13 billion for 2019/20 to respond to possible requests for financial support
- Support budget-neutral "as far as possible"
- Cabinet considering proposal to end guarantees for operational purposes
- Mboweni: Summit must be held on where to go with state-owned enterprises (SOEs).
Read: Wanted: Equity partners for Eskom Transmission
Growth and other key figures
- GDP growth for 2019 revised downwards from 1.7% to 1.5% (2020: 1.7%; 2021: 2.1%)
- Tax revenue for 2018/19 to undershoot mini-budget estimate by R15.4 billion, half of this due to higher than expected Vat refunds
- Consolidated budget deficit to widen to 4.2% in 2018/19 from mini-budget estimate of 4% (2019/20: -4.5%; 2020/21: -4%)
- Gross debt to GDP ratio to stabilise at 60.2% in 2023/24, higher than mini-budget projection of 59.6%
- In 2019/20 government will spend R243 billion more than it earns (revenue of R1.58 trillion and spending of R1.83 trillion)
- SA is borrowing R1.2 billion each weekday
- Interest expenditure is R1 billion per day.
Read: The bottom line and what we are going to do about it
- No change to personal income tax rates or brackets but slight adjustment to rebates (revenue of R12.8 billion to be raised this way; collection by stealth)
- No inflationary adjustment to medical tax credit
- No changes to tax rates for corporate income tax or Vat
- Employment tax incentive of up to R1 000 can be claimed for employees earning up to R4 500 pm (previously R4 000)
- Sugar tax increase from 2.1 cents per gram to 2.21 cents per gram
- Carbon tax of 9c per litre on petrol and 10c per litre on diesel effective June 5
- General fuel levy increase by 15c per litre
- Road Accident Fund levy increase by 5c per litre
- Plans to tax electronic cigarettes and tobacco heating products
- Excise duty on cigarettes to rise by R1.14 to R16.66, and 12 cents to R1.74 per can of beer
- New Sars commissioner to be appointed "in the coming weeks"
- Judge Dennis Davis to assess tax gap (difference between tax due and tax collected)
- Review of explosion of duty-free shops in SA planned
- Introduction of export tax on scrap metal to be explored.
Read: Funds for NHI to be redirected to improving health services
Read: Commuter costs set to rise as fuel taxes accelerate
- Baseline expenditure adjusted downwards by R50.3 billion since mini-budget
- Half of the reduction comes from adjustments to spending on compensation
- Older public servants may retire early and gracefully, leading to savings of R4.8 billion in 2019/20; R7.5 billion in 2020/21 and R8 billion in 2021/22
- Limits on overtime, bonus payments and pay progression planned
- Staffing of diplomatic missions considered "unjustified", to be reviewed
- No salary increases for members of parliament and provincial legislatures or executives at public entities
- Provisional allocations for financial support to Eskom and Infrastructure Fund offsets baseline reduction
- Expenditure ceiling revised upwards by R16 billion over three years
- Allocation to Jobs Fund to rise to R1.1 billion over three years
- Old age grant rises R80, foster care up R40 to R1 000, and child support grant to R420 in April and R430 in October
- Help-to-buy subsidy to help first-time home buyers purchase a home; R950 million for pilot phase over three years.
Read: #Budget2019: This is what you'll pay
- Central pillar of budget and reprioritisation
- Will accelerate R526 billion of on-budget projects by bringing in the private sector and development finance institutions
- In several cases, the private sector will design, build and operate key infrastructure assets
- Government to commit R100 billion over next decade.