From reducing the public sector wage bill, to strict new rules for state owned enterprises, and fixing SARS, Finance Minister Tito Mboweni’s budget – while tough – has a few positives to reflect on.
Mboweni says that government’s central economic policy goal remains to accelerate inclusive growth and create jobs, while ensuring sustainable finances by containing the Budget deficit and stabilising public debt.
Mboweni announced that national and provincial civil servant pay will be reduced by R27 billion over the next three years. This includes offering early retirement packages, limiting bonuses, and no salary hikes for MP’s and CEO’s at state owned entities this year.
#Mboweni As a gesture of goodwill, members of Parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year. Minister Ayanda Dlodlo will outline the details of the early retirement framework. #Budget2019
— ANC Parliament (@ANCParliament) February 20, 2019
Eskom will get R23 billion each year over the next three years, to assist in the splitting up of the power giant, with Mboweni emphasising government is not taking on Eskom’s astronomical R400 billion debt.
Meanwhile, the SARS large business unit is making a comeback, which will assist in collecting tax from big business. A permanent SARS commissioner will also be appointed shortly.
#Mboweni: Collecting the revenue due to the state is the underlying foundation of our democracy, of building a nation, and it is our duty to pay for services especially if we can afford to do so #Budget2019
— Parliament of RSA (@ParliamentofRSA) February 20, 2019
More good news is that education will receive the largest share of South Africa’s 2019 Budget, with basic education allocated R262.4 billon in the next financial year.
Mboweni said while most of this money will be used to pay teachers, R30 billion will also go towards building new schools and maintaining infrastructure. R2.8 billion will be used to replace pit latrines at over 2400 schools.
There is also relief for recipients of social grants:
#Budget2019 as from April 2019, social grants will increase as follows:
•R80 increase for Old Age, Disability and War Veterans Grant
•R40 increase for Foster Care Grant to R1000
•Child Support Grant will increase to R420 in April and to R430 in October 2019 #RSABudget2019
— SASSA (@OfficialSASSA) February 20, 2019