Mister Speaker.
The 2013 Budget is presented in challenging times, but against the background of a new strategic framework for growth and development. This is a budget in which there is limited room for expansion, yet there are significant opportunities for change.
| • | There are signs of improvement in the world economy, though the outlook remains troubled. |
| • | South Africa’s economy has continued to grow, but at a slower rate than projected at the time of the 2012 Budget. |
| • | The 2013 Budget takes the National Development Plan as its point of departure. The strategic plans of government and the medium-term expenditure plans will be aligned to realise our objectives. |
| • | Government has taken measures to control growth in spending. Spending plans have been reduced by R10.4 billion through reprioritisation, savings and a draw-down on the contingency reserve. |
| • | Government remains committed to a large-scale infrastructure investment programme. |
| • | Our path of spending and the recovery in revenue will stabilise debt at just higher than 40 per cent of GDP. The budget deficit will fall from 5.2 per cent of GDP in 2012/13 to 3.1 per cent in 2015/16. |
| • | A review will be initiated this year of our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability. |
| • | In the 2013/14 fiscal year, personal income tax relief of R7 billion is granted. |
| • | A new local government equitable share formula is proposed, providing a subsidy for free basic services designed to reach 59 per cent of households. |
| • | Further education and training will continue to be extended and enhanced. |
| • | In this budget we continue to invest in education, health, housing, public transport and social development – components of the social wage which add up to about 60 per cent of public expenditure. |
| • | As part of a package of measures aimed at boosting opportunities for young work seekers, government recognises the need to share the costs of expanding job opportunities with the private sector. And following careful consideratoin of inputs from various stakeholders, a revised youth employment incentive will be tabled in the House after consultation with various stakeholders, together with a proposed employment incentive for special economic zones. I quote from the Budget Review: |
"Government’s existing approach to supporting employment growth focuses on training, skills development, labour market activation and short-term public employment. Programmes in support of these objectives include sector education and training authorities, further education and training colleges, small enterprise support, the Industrial Policy Action Plan, the expanded public works programme and the community work programme. To complement existing programmes, a tax incentive aimed at encouraging firms to employ young work seekers will be tabled for consideration by Parliament. The introduction of this tax incentive, which takes into account the concerns of organised labour, will help young people enter the labour market, gain valuable experience and access career opportunities. The administratively simple incentive will create a graduated tax incentive at the entry-level wage, falling to zero when earnings reach the personal income tax threshold. Protection provided by existing labour legislation, combined with oversight by the South African Revenue Service and the Department of Labour, will limit any displacement that might arise. A similar tax incentive will be made available to eligible workers of all ages within special economic zones."
