It’s almost annual Budget Speech time, meaning that numbers, indexes and percentage points are going to fly all over our TV screens, newspapers and social media feeds for the next few days. To help you brace yourself for how this year’s budget is going to affect you as a young person, we’ve put together this summary of 2015 and 2016’s budgets to help you know what to expect this year.
Expect an increase in sin taxes and the introduction of a sugar tax
Sin taxes are increases on alcoholic beverages and tobacco products that are announced every year. Higher increases in sin taxes and the introduction of a sugar tax are likely. This is the treasury’s way of avoiding an increase in personal income tax, among other measures.
Expect growth targets of more than 1% but not higher than 2%
The projected growth figures for 2017 are compared to a global growth outlook of 3.1%. The finance minister is likely to announce growth targets of more than 1% but not higher than 2%.
Expect an increase in social grants
Annual increases for grants are made in order to keep the amounts in line with the rising cost of living and inflation.
World Bank statistics from 2009 puts South African social expenditure of 4% of its GDP on par with another developing country, Ukraine, but below Malawi and Ethiopia (about 4.5%) and far behind Mauritius (nearly 8%). This is still at the high end of the scale, with Jamaica (below 1%), Poland (just over 1%) and Argentina (1.5%) being much more typical.
Expect schools to be supplied with water and provided with electricity
The bulk of spending in basic education is primarily used to pay for teachers’ salaries, to maintain existing schools and build new schools and support infrastructure. In 2015, approximately R3.1 billion was allocated to funding studies for new, young teachers to enter the system.
In 2016, much of the budget was specifically allocated for 510 unsafe schools to be rebuilt, 1120 schools to be supplied with water and 916 schools to be provided with electricity over the next three years.
Expect an increase to NSFAS budget
In 2016, the minister also announced that R2.5 billion was allocated to NSFAS to clear outstanding student debt, with a further R8 billion allocated to enable students already enrolled to complete their students.
What are your predictions for #Budget2017? What do you think the ministry of finance should be prioritising in its spending and budget? Tell us by following and tagging us on @ProjectDemoZA and using the hashtag #Budget2017 on Twitter and VIP Live ZA on Facebook.
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