Budget Speech 2014Overview of the 2014 Budget |
Mister Speaker, allow me to summarise the key features of the 2014 Budget.
The economy
| • | The global economic outlook remains unsteady – some advanced economies have returned to growth, others continue to lag. The slowdown in quantitative easing by the Federal Reserve has caused further uncertainty to financial markets, currency volatility and capital outflows from emerging markets. |
| • | South Africa’s economy has continued to grow, but more slowly than projected a year ago. We expect growth of 2.7 per cent this year. |
| • | A weaker exchange rate is a risk to the inflation outlook, but it supports exporters. Sustained improvements in competitiveness require further investment in infrastructure and a range of microeconomic reforms. |
The budget framework
| • | Despite slower economic growth, the 2013/14 budget deficit is projected to be 4 per cent of GDP, lower than projected in October. |
| • | The deficit will narrow to 2.8 per cent of GDP over the medium term, and net debt will stabilise at about 45 per cent of GDP in 2016/17. |
| • | Consolidated non-interest spending will amount to R1.1 trillion in 2014/15, growing to R1.3 trillion in 2016/17, increasing by about 2 per cent a year over the medium term. |
| • | National government departments are allocated approximately 48 per cent of available funds, provinces 43 per cent and municipalities 9 per cent. |
| • | Capital spending is the fastest-growing component of expenditure, and is set to exceed inflation by over 4 per cent a year. |
Benefits to households
| • | The Budget provides R9.3 billion in income tax relief to households. |
| • | Government will expand its employment programmes over the next three years and continue to support job creation by the private sector. |
| • | We will build 216 000 houses and connect 905 000 households to electricity over the MTEF period. |
| • | The number of children receiving the child support grant will increase to 11.4 million. |
| • | 433 schools will be rebuilt. |
Support for businesses
• Increased support and tax relief for entrepreneurs and small businesses is proposed.
| • | Incentives for industry are strengthened, including funding for special economic zones. |
| • | Nearly 500 000 subsistence and small-holder farmers will receive training and financial support. |
Financial security
| • | Further steps will be taken to make sure you have a secure income in retirement. Unnecessary costs in the system will be cut. |