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You are here: Home / Archives for Budget

Budget

16 November 2023

Why Resorts Are The Perfect Venue For A Destination Wedding

Location: MyPR

The rising trend amongst couples looking for unique wedding experiences on their special day to create lasting, magical memories, is a key reason why destination weddings have become so popular. And there’s one setting that has proven time and again to be perfect for creating these unforgettable moments – resorts. Shaun Lamont, the Managing Director …

Read moreWhy Resorts Are The Perfect Venue For A Destination Wedding
15 November 2023

Productivity SA responds to NEHAWU strike action

Location: MyPR

PRODUCTIVITY SA MANAGEMENT STATEMENT ON NEHAWU STRIKE Productivity SA Management confirms that members of the National Education, Health, and Allied Workers’ Union (NEHAWU) falling within the Bargaining Unit are on strike with effect from the 13th of November 2023. The picket is taking place at all the Productivity SA Offices, namely Midrand, Durban, and Cape …

Read moreProductivity SA responds to NEHAWU strike action
14 November 2023

Elevate Your Space with Premium Door Hardware

Location: MyPR

In the world of interior design and architecture, every detail matters, and door hardware is no exception. The choice of pull handles, lever handles, door locks, and other door-related components can significantly impact the functionality, aesthetics, and security of a space. In this guide, learn more, we’ll explore these essential categories of door hardware and …

Read moreElevate Your Space with Premium Door Hardware
14 November 2023

Finding the Perfect Forklift Solution: For Sale, Hire, or Rentals

Location: MyPR

Introduction: Forklifts are an essential part of many industries, helping to move heavy loads and streamline operations. Whether you’re a business owner looking to expand your fleet, a project manager in need of a temporary solution, or a startup entrepreneur trying to find the most cost-effective option, understanding the choices available to you is crucial. …

Read moreFinding the Perfect Forklift Solution: For Sale, Hire, or Rentals
14 November 2023

The World of Wendy Houses: Affordable, Cozy, and Perfect for Your Backyard”

Location: MyPR

Introduction: If you’re in search of a charming addition to your backyard or garden, Wendy House options could be just what you need. These delightful little structures have been adorning gardens for generations, offering a range of uses from playhouses to outdoor retreats. In this blog, we’ll explore the world of Wendy Houses, discussing their …

Read moreThe World of Wendy Houses: Affordable, Cozy, and Perfect for Your Backyard”
14 November 2023

Streamlined Solutions for Rubble Removal and Skip Bin Hire

Location: MyPR

In today’s fast-paced world, efficient and reliable services have emerged to address the growing challenges of waste management, debris removal, and waste recycling. These services have become essential in maintaining clean and organised spaces for residential and commercial clients. Learn more. Let’s delve into the two key categories that are transforming the landscape of waste …

Read moreStreamlined Solutions for Rubble Removal and Skip Bin Hire
10 November 2023

Government launches project to eliminate litter

Location: News

Government launches project to eliminate litter

Government has unveiled an initiative aimed at clearing the 7 251 illegal dumping hotspots in communities across the country – a project which has created more than 37 000 work opportunities.

The Municipal Cleaning and Greening initiative will be implemented in 14 prioritised municipalities across the nine provinces through the Department of Forestry, Fisheries and the Environment’s Expanded Public Works Programme (EPWP) mass employment In-House Model, which allows it to implement and manage projects using its own staff.

“The impact of the 37 049 EPWP participants is visible across the country since their work includes daily cleaning streets, clearing illegal dumping sites, cleaning coastal areas and the revitalization of parks,” Minister of Forestry, Fisheries and the Environment Barbara Creecy said on Friday.

She made these remarks during the launch of the department’s mass employment programme to augment the Cleaning and Greening initiative in Motherwell, Nelson Mandela Bay Metropolitan Municipality (NMBMM), Gqeberha.

As of 30 September this year, 1 299 or 19 percent of the sites have been cleared.

“Illegal dumping poses a health hazard to communities and undermines community morale and good governance. From an environmental perspective, illegal dumping poses serious risks to livestock, wetlands, rivers and marine and coastal areas.

“As the world moves to find more effective ways to combat plastic pollution, our government is taking more significant steps to improve municipal waste collection, ensure landfill compliance and promote waste recycling,” Creecy said.

The initiative is targeted at cleaning up illegal dump sites in provincial capitals including the City of Cape Town, Sol Plaatjie, Mafikeng, Msunduzi, Polokwane, City of Joburg, City of Ekurhuleni, City of Tshwane, Mogale City, Sedibeng, Mbombela and Mangaung.

In some instances, the cleaning and greening projects have rehabilitated wetlands which are important not only for spiritual or economic reasons but for their ecosystem services as well.

“Here in Nelson Mandela Bay we have identified 512 sites that require cleaning and today we show you some of the 41 sites where we have already begun our work.

“We assisted the municipality to find the budget to purchase a specialised fleet for waste collection; ensured additional refuse collection in to the un-serviced poor areas; supported improvements to waste disposal facilities and worked with the municipality to clear 41 illegal dumping hot spots,” the Minister said.

The greater clean-up programme across the Eastern Cape is creating a total of 8 000 work opportunities.

Municipalities that are part of this programme include Buffalo City Metro and municipalities that fall under Alfred Nzo, OR Tambo, Amatole, Chris Hani, Sarah Baartman and Joe Qabi District Municipalities.

“The Municipal Cleaning and Greening programme is a partnership with provinces and municipalities who assist in recruiting our public works participants and also provide protective clothing, and cleaning materials while we provide the stipend to all participants,” the Minister said.

To ensure sustainability of the programme, the cleaning and greening initiative includes planting trees in the rehabilitated dumping sites.

“We are planting both indigenous trees, in line with the water scarcity of the country, and the fruit trees to contribute towards food security. Communities are responsible for maintaining the trees within their households.

“This initiative is supported by assisting communities to understand the environmental and food security role of trees. A total of 225 000 trees will be planted by government throughout the country during this financial year, with 3000 committed for the Nelson Mandel Bay.”

As total of 2000 trees have been planted and the remaining 1000 will be planted over the next few months.

“The department fully acknowledges that part of the solution to the problem is to change societal attitudes and behaviour and to mobilise the public to begin taking charge and responsibility for keeping their neighbourhoods clean. However, we must also acknowledge that where municipalities have inadequate household waste collection the problem of dumping increases,” the Minister said.

Since the initiation of this programme, the department has processed applications for the specialised waste management vehicles from over 100 municipalities across the country.

In the last two years, government has spent over R164 million to buy 44 waste collection vehicles and 21 landfill management waste vehicles for 58 municipalities. – SAnews.gov.za

 

nosihle
Fri, 11/10/2023 - 11:29

188 views
Read moreGovernment launches project to eliminate litter
7 November 2023

SEIFSA Welcomes The Policy Pronouncements In The Medium-Term Budget Policy Statement

Location: MyPR

Johannesburg, November 2023 – The 2023 Medium Term Budget Policy Statement (MTPBS) recognises, reflects and has been structured to respond to key headwinds facing the global and South African economy. The policy positions contained in this mini-budget are welcome for the fact that they communicate important reform signals. The only way to place the economy …

Read moreSEIFSA Welcomes The Policy Pronouncements In The Medium-Term Budget Policy Statement
7 November 2023

Crown Relocations offers varied career prospects & skills development

Location: MyPR

Crown Relocations South Africa is a leader in global mobility, providing relocation and moving services for individuals, families, and businesses worldwide. With a commitment to talent development and a passion for excellence, Crown Relocations South Africa is dedicated to helping individuals thrive in the relocations industry. The dynamic and thriving relocations industry encompasses a vast …

Read moreCrown Relocations offers varied career prospects & skills development
7 November 2023

Limpopo Premier to hand over ambulances to Sekhukhune district

Location: News

Limpopo Premier to hand over ambulances to Sekhukhune district

Limpopo Premier Chupu Stanley Mathabatha is expected to hand over 35 brand new ambulances to the Emergency Medical Services (EMS) at district municipality offices in the Sekhukhune District.

The new fleet of EMS vehicles is a major step in the department's ongoing commitment to enhancing healthcare services for all residents in the province.

The handover is a pivotal moment aligning with the goal set by Health MEC, Dr Phophi Ramathuba (during the 2023/24 budget speech) of providing a total of 500 new ambulances.

In recent months, 105 new ambulances have been commissioned and allocated to EMS stations across the province.

Other districts and EMS stations are in the queue to receive new ambulances in the upcoming tranches.

Mathabatha emphasised the crucial role of ambulance services in delivering timely medical care to patients, ensuring immediate attention, providing vital first aid, stabilising patients and preventing the deterioration of their condition.

"Improving our ability to respond swiftly to emergency situations is our top priority," said Mathabatha. – SAnews.gov.za

Edwin
Tue, 11/07/2023 - 09:07

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Read moreLimpopo Premier to hand over ambulances to Sekhukhune district
6 November 2023

MTBPS a ‘frank assessment’ – Cabinet

Location: News

MTBPS a 'frank assessment' - Cabinet

Cabinet has welcomed the Medium Term Budget Policy Statement (MTBPS) tabled by Finance Minister Enoch Godongwana last week.

“The 2023 Medium Term Budget Policy Statement… provided a frank assessment of the current economic climate and demonstrated government’s firm hold on our nation’s finances amid tough revenue constraints.

“The decisions in the MTBPS improve our fiscal framework; stimulate economic growth, while balancing our social commitments that support the vulnerable in our nation. The Economic Reconstruction and Recovery Plan has contributed to many green shoots in our economy,” said Minister in The Presidency Khumbudzo Ntshavheni, who briefed the media on Monday.

Meanwhile, Cabinet has called on parents and guardians to continue supporting matric learners, who enter the second week of their final examinations this week.

The learners are expected to be examined in subjects including mathematics, physical sciences, a wide range of languages and economics.

Ntshavheni said:  “Cabinet welcomed the smooth start to the 2023 National Senior Certificate (matric) exams, which commenced on 30 October 2023. Parents and guardians are encouraged to continue to support learners during this critical period.

“Cabinet also sends its well wishes to all the learners who will be sitting for their year-end exams.” – SAnews.gov.za

NeoB
Mon, 11/06/2023 - 14:32

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Read moreMTBPS a ‘frank assessment’ – Cabinet
6 November 2023

QUIZ: Discover Your Travel Persona: Millennial, Baby Boomer, Gen X, Y, or Z?

Location: MyPR

ekko, the lifestyle brand catering to millennials, has crafted an entertaining quiz designed to unveil your unique travel persona. Samantha Pillay, Director at ekko, says that while your age may assign you to one group or category, your identity can shift in different life aspects. “For example, as a Millennial, I find myself aligning more …

Read moreQUIZ: Discover Your Travel Persona: Millennial, Baby Boomer, Gen X, Y, or Z?
3 November 2023

Community policing forums should be holding police accountable

Location: News

CPFs are not just there to help cops do their jobs

Read moreCommunity policing forums should be holding police accountable
3 November 2023

Government on course to manage expenditure

Location: News

Government on course to manage expenditure

The sixth administration is on course to prudently manage government expenditure while retaining the focus on infrastructure, health, education and policing as critical areas of growth and development.

This is according to President Cyril Ramaphosa who was responding to Questions for Oral Reply in the National Assembly on Thursday. 

Leader of the opposition party (Democratic Alliance), John Steenhuisen asked the President the reasons for the drastic budget cuts to government departments, which will have an impact on government’s delivery of frontline services at a time when citizens are being battered by the cost-of-living crisis.

The President highlighted that the Minister of Finance tabled the Medium-Term Budget Policy Statement (MTBPS) on Wednesday, which outlined the country’s fiscal position and provided information on government’s spending priorities over the next three years.

  
“Among other things, the Minister of Finance indicated in the MTBPS that we are resolved to stabilise public finances while maintaining support for the most vulnerable and protecting frontline services.

  
“At the same time, we are fast tracking growth-enhancing reforms, which includes a new financing mechanism for large infrastructure projects. Work is underway to reconfigure the structure and size of the state, while strengthening its capacity to deliver quality public services,” the President said. 

President Ramaphosa told Members of Parliament that the cost containment guidelines issued by the National Treasury give advice and guidance to government departments to ensure a sound and prudent management of public finances in the context of significant constraints.

“The increase in fiscal constraints is mainly due to reduced revenues. The cost containment guidelines target non-critical spending items such as travel, catering, accommodation and capital items that have not yet commenced,” he said. 

Turning to the discussions that the President and Deputy President Paul Mashatile have had with Ministers on an ongoing basis, President Ramaphosa said the meetings are focused on how programmes and activities undertaken by departments advance economic growth, social development and service delivery.

“Ministers and their departments engage with National Treasury on how best to implement any budget restructuring and delay projects where necessary without compromising the needs of communities,” he said. - SAnews.gov.za

 

 

DikelediM
Fri, 11/03/2023 - 09:10

275 views
Read moreGovernment on course to manage expenditure
3 November 2023

Tshwane must stop violating Hammanskraal residents’ rights

Location: News

Following the cholera outbreak in Hammanskraal, the City needs to comply with the Public Protector’s orders

Read moreTshwane must stop violating Hammanskraal residents’ rights
3 November 2023

Mandela Park families approved a sample toilet in 2008. 15 years later, they’re still waiting for the rest

Location: News

Residents of Eastern Cape informal settlement say they’re not going to vote unless they get their promised toilets

Read moreMandela Park families approved a sample toilet in 2008. 15 years later, they’re still waiting for the rest
2 November 2023

SARS welcomes MTBPS revenue revision

Location: News

SARS welcomes MTBPS revenue revision

The South African Revenue Service (SARS) has welcomed the tabling of the Medium Term Budget Policy Statement (MTBPS), despite the statement’s downward revision of revenue collection by some R56.8 billion.

The MTBPS was tabled by Finance Minister Enoch Godongwana in Parliament on Wednesday.

“SARS has continued with its core functions of collecting all that is due to the fiscus. During the first half of the current fiscal year, we have collected gross revenue totalling R1 016.3 billion, growing by 4.5% and recording a surplus of R1.0 billion against the Budget 2023 estimate.

“This performance is on the back of strong gross collections from VAT, Fuel Levy and PIT [Personal Income Tax], partially offset by lower gross collections from CIT [Corporate Income Tax], as company profits remain under pressure. Without our assistance, the fiscal framework would have been under greater pressure.

“This is a good news story and offers hope in a currently challenging environment. Through focused commitment, SARS has paid back to the economy through refunds for the first six months of the current fiscal year an amount totalling R212.2 billion, higher by R24.6 billion over the prior year and higher than the Budget 2023 estimate by R30.1 billion,” the revenue service said in a statement.

The 2023 main budget had projected collections would reach some R1.78 trillion but that has now been revised down to R1.73 trillion.

“Income and profits in the broader economy have been adversely affected from what was anticipated at the 2023 February Budget. Provisional corporate income tax collections, from especially the mining sector, have reduced at the end of the June 2023 and led to a larger than expected deficit against the 2023 Budget estimate.

“Nevertheless, higher-than-estimated profitability in the finance sector (amongst others) supported provisional corporate income tax and dividends tax collections. Main sector performance that showed growth includes – Finance 7.8% from employment and vesting of shares, Community 6.8% from annual salary increases (mainly Government) and Wholesale 6.2%, mainly from retail and vehicles,” SARS said.

The revenue service highlighted that net tax revenue performance is “impacted adversely” by local and global challenges.

“A slowdown in mining production is down 55% due to lower demand of coal. This is compounded by disruptions to and underinvestment in freight and logistics networks, which erode the competitiveness of the South African economy. The intermittent and inadequate electricity supply remains the most immediate and significant constraint to production, investment, and employment.

“Rising inflation rates constrained household spending by raising the cost of living. Global growth slowed further in recent months. Central banks are countering the effects of high inflation by implementing restrictive monetary policies for longer than anticipated which negatively impact on all developing countries. Several global risks remain, including the increase in geo-political tensions, resulting in the need for stronger domestic demand to support economic growth,” SARS said.

The revenue service added that Gross Compliance Revenue yielded some R118.4 billion.

Key focus areas in this regard include:

  • R11.9 billion from revised assessments flowing from the verification of 1.12 million returns, up Y/Y up by R5 billion (70%).
  • Almost R40 billion that was secured from resolving more than 440k debt collection cases, up Y/Y R4 billion (±12%).
  • R2.3 billion secured from 121 illicit investigations and 181 state capture cases in progress, 27 cases handed to the NPA.

Fraudulent claims

SARS highlighted that fraudulent refund claims remain a concern for the tax collector.

“At R172.1 billion, VAT refund payments contribute 81% to the overall outflows, growing against last year by R21.5 billion. 84% of all VAT Refunds are paid within 21 days, up from 77% last year. However, like all other revenue agencies, impermissible and fraudulent refunds remain a concern in this year, SARS prevented R45 billion from being paid out.

“Equally important is that we have prevented R45 billion from being paid out following verification activities that were enabled by Artificial Intelligence. Impermissible and fraudulent refunds remain a concern, and we must deal with this phenomenon,” the tax collector said.

SARS Commissioner Edward Kieswetter encouraged South Africans to do the right thing and pay what is due to the tax authority.

“The historic win by the Springboks on Saturday communicates an important yet simple message – that every single point makes a massive difference between winning and losing. While the odds were stacked heavily against the Springboks, it took superhuman efforts individually and collectively to contribute to what at times look like an impossible victory.

“It is therefore incumbent upon all of us as South Africans to play by the rules like the Springboks and never give up until the final whistle blows,” Kieswetter said. – SAnews.gov.za

NeoB
Thu, 11/02/2023 - 09:07

654 views
Read moreSARS welcomes MTBPS revenue revision
2 November 2023

Protesters storm Durban City Hall

Location: News

Presidential Employment Programme workers received SMSes on Sunday stating that the programme was suspended due to a lack of funds

Read moreProtesters storm Durban City Hall
2 November 2023

Here’s how South Africa’s social grant system has changed since 1994

Location: News

SASSA pays 26-million grants every month

Read moreHere’s how South Africa’s social grant system has changed since 1994
2 November 2023

Government addressing deficiencies that led to grey listing

Location: News

Government addressing deficiencies that led to grey listing

Government is working hard to address deficiencies in the fight against organised crime and illegal financial flows, says Minister of Finance Enoch Godongwana.

“Since February, when South Africa was grey listed by the Financial Action Task Force (FATF), a large number of government departments and agencies – including the police and the Hawks, National Prosecuting Authority (NPA), Special Investigating Unit (SIU), State Security Agency (SSA), the Reserve Bank, Financial Sector Conduct Authority (FSCA) and South African Revenue Service (SARS) – have been working hard to address these deficiencies,” the Minister said.

Delivering the Medium Term Budget Policy Statement on Wednesday in Parliament, he said last week the FATF noted at its plenary meeting that such work is showing positive results.

South Africa has addressed 15 of the 20 technical deficiencies in its legal framework and has made good progress on 17 of the 22 effectiveness action items, including two that are now deemed to be largely addressed.

“However, there is also a significant amount of work that must still be done, particularly with regard to the investigation and prosecution of complex money laundering cases and terror financing, the identification of informal mechanisms for remitting money around the world, and the recovery of the proceeds from crime and corruption,” the Minister said.

Government expects to address all the deficiencies identified by the FATF by early 2025.

“We are also devising ways to make better and more targeted use of the Criminal Asset Recovery Account (CARA) to address crime. Among these efforts, and emanating from the Presidential project on illicit mining strategy, a recommendation has been made for Cabinet to consider using money from the fund to combat illegal mining.

“The South African Police Service, The Defence Force, the Financial Intelligence Centre, the Department of Home Affairs and the Border Management Authority have all received allocations from this fund,” the Minister said.

Improving efficiencies

He said over the Medium Term Expenditure Framework (MTEF) period, the focus is on improving efficiency and reprioritising funds towards key programmes.

The SAPS will contain costs and streamline operations as headcounts decline due to natural attrition.

“It will foster partnerships with communities and implement reforms to optimise resource allocation, training and technology. Government will continue to fill critical posts in the Border Management Agency and verify assets transferred from departments to the agency.

“To reduce employee compensation pressure, the Department of Defence will implement human resource reforms and review commuted overtime and allowance policies. Furthermore, funds will be reallocated in the Department of Defence to provide for day-to-day maintenance and emergency repairs,” the Minister said.

The Department of Justice and Constitutional Development will reallocate funds over the MTEF period to capacitate the Office of the Legal Services Ombud.

“Funding will also be shifted from the Department of Agriculture, Land Reform and Rural Development to Legal Aid South Africa to improve its capacity to provide legal representation in land rights matters.

“To strengthen its independence, the Judicial Inspectorate for Correctional Services will become a government component in 2024/25. Concomitant resources, currently in the baseline of the Department of Correctional Services, will be transferred with the inspectorate,” the Minister said.

Government will continue to fill critical posts in the Border Management Agency and verify assets transferred from departments to the agency. –SAnews.gov.za

 

 

nosihle
Wed, 11/01/2023 - 14:04

623 views
Read moreGovernment addressing deficiencies that led to grey listing
2 November 2023

Revenue collection projected to decline

Location: News

Revenue collection projected to decline

Revenue collection is expected to fall by some R56 billion below the 2023 Budget predictions, according to the National Treasury Medium Term Budget Policy Statement (MTBPS).

The MTBPS notes that slowing commodity exports, slower growth, downward revisions of the tax base growth, slowing corporate tax collections and lower net VAT collections have all impacted tax revenue.

The 2023 Budget had projected collections would reach some R1.78 trillion but that has now been revised down to R1.73 trillion.

“In recent years, revenue collection has benefited from a pattern of high prices for South Africa’s commodity exports. In the current year, commodity prices have fallen faster than expected and value‐added tax (VAT) refund claims have risen, resulting in revenue collections projected to be R56.8 billion below 2023 Budget estimates.

“The moderate revenue outlook is limited by the domestic economic outlook and negative shifts in the global economy,” the department said.

This as Minister of Finance Enoch Godongwana tabled the Medium Term Budget Policy Statement in Parliament on Wednesday.

Key factors which have affected revenue collection in the first half of 2023/24 include:

  • Significantly reduced mining sector profitability. Mining provisional corporate tax collections fell by R24.6 billion or 55.4 percent relative to the same period in 2022/23. Lower commodity prices, weaker global growth, increased incidence of power cuts and logistical constraints have weighed heavily on the sector.
  • VAT refund payments are R21.5 billion higher relative to the same period last year due to stronger-than-expected exports; increased investments in embedded generation; and higher costs of doing business, including the use of more expensive road rather than rail transport. Stronger import VAT collections partially offset robust VAT refund payments.
  • A sustained recovery in earnings and higher bonus payments have benefited personal income tax collections, with employees’ tax from the finance sector driving the strong year-to-date growth.

“The tax-to-GDP ratio is expected to decline to 24.7 percent in 2023/24 from 25.1 percent in 2022/23. A recovery in this ratio depends on more sustainable economic growth.

“Main budget revenue estimates for 2023/24 have been lowered by R44.4 billion compared with the 2023 Budget, mainly driven by lower estimates for tax revenue, while National Revenue Fund receipts have been revised up by R11.3 billion mainly due to higher expected revaluation profits from foreign-currency transactions,” Treasury said.

Future revenue

The department said due to the increased fiscal consolidation that is required, “the Minister of Finance will propose tax measures to raise additional revenue of R15 billion in 2024/25 in the 2024 Budget”.

“Tax revenues are expected to increase to R2.1 trillion, or 25.1 percent of GDP, by 2026/27. Revenue collection, however, is projected to fall short of 2023 Budget estimates by R121.4 billion between 2024/25 and 2025/26, with tax buoyancies generally lower over the medium term.

“Relative to the 2023 Budget, main budget revenue estimates for the next two years have been lowered by R152 billion, mainly driven by downward revisions to tax revenue projections. Non-tax revenue estimates for the next two years have also been reduced by R24.4 billion due to lower mineral and petroleum royalties and departmental receipts. Payments to the Southern African Customs Union (SACU) are revised up,” the department said.

Treasury insisted that improved economic growth and further gains in tax administration are critical for improving tax revenues.

“The sharp contraction in commodity prices now under way suggests that the windfall tax receipts that South Africa enjoyed in recent years have come to an end. Under-collections in corporate income tax receipts relative to 2023 Budget estimates flow through to the outer years. Stronger VAT refund payments over the medium term partly reflect higher renewable energy investments and responses to structural constraints in logistics and fuel refinery capacity.

“The outlook for most major tax bases has also been revised lower relative to the 2023 Budget. Personal income tax collections are marginally better than expected due to near-term gains; however, medium-term prospects for employment growth remain muted.

“Although South Africa’s tax-to-GDP ratio remains relatively resilient, stronger economic growth and further gains in tax administration are needed to improve tax revenues over the medium to long term,” the department said. – SAnews.gov.za

 

NeoB
Wed, 11/01/2023 - 14:05

624 views
Read moreRevenue collection projected to decline
1 November 2023

Rising government debt servicing hinders social spending

Location: News

Rising government debt servicing hinders social spending

The servicing of government’s rising debt is “crowding out” social spending in the country, says Finance Minister Enoch Godongwana.

The Minister on Wednesday delivered the Medium Term Budget Policy Statement in Parliament, where he explained the challenge posed to spending on social services.

“It is important… to point out that our debt levels and rising debt service costs are not problems in and of themselves.

“Our challenge is that rising debt service costs are crowding out important social spending, and our economy has not grown fast enough to support increasing expenditure or our current debt levels. Therefore, this policy statement sets out our strategy for avoiding a fiscal crisis and preventing the build-up of systemic risks to the economy,” he said.

This strategy will include reduced spending and reprioritisation “while also taking concrete steps to support growth”.

“None of these decisions are taken lightly. They are taken with the short- and long-term viability of public finances in mind, and in the interests of balanced and inclusive growth,” Godongwana said.

He explained that over the past 15 years, government’s spending has exceeded revenue, with government expected to borrow an average of some “R553 billion per year over the medium term”.

“As a result, gross debt rises from R4.8 trillion in 2023/24 to R5.2 trillion in the next financial year. By 2025/26, it will exceed the R6 trillion mark. We now expect gross government debt to stabilise at 77% of GDP by 2025/26. This is higher than the level we forecast in February.

“Over the next three years, debt service costs, as a share of revenue, will increase from 20.7% in 2023/24 to 22.1% in 2026/27. The cost, or interest of this debt, for next year alone, amounts to around R385.9 billion. Over the MTEF [Medium Term Expenditure Framework], interest costs amount to R1.3 trillion,” he said.

Tightening purse strings

The Minister said in this current financial year, spending has been brought down by some R21 billion, with further reductions of R64 billion and R69 billion contemplated for the 2024/25 and 2025/26 financial years.

“The implications of these adjustments will be partially offset by departments implementing the cost containment guidelines issued by National Treasury.

“It will also be offset by implementing control measures on payroll systems, in line with the directive issued by the Department of Public Service and Administration, as well as implementing the recommendations from the spending reviews conducted in the past two fiscal years.

“Government has made a strategic decision to allocate funds to sectors that are personnel heavy, such as Health, Education and Police Services,” Godongwana said. – SAnews.gov.za

NeoB
Wed, 11/01/2023 - 14:06

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Read moreRising government debt servicing hinders social spending
1 November 2023

COVID-19 social grant extended until 2025

Location: News

COVID-19 social grant extended until 2025

Government has extended the COVID-19 Social Relief of Distress Grant (SRD Grant) until March 2025 while it considers social security policy reforms and a funding model.

The grant was introduced to support low-income individuals affected by the lockdowns during the COVID-19 pandemic.

Delivering the Medium Term Budget Policy Statement (MTBPS) to Parliament on Wednesday, Minister of Finance Enoch Godongwana said R34 billion has been allocated to extend the grant by another year.

“Over the medium term, a provisional allocation is retained while a comprehensive review of the entire social grant system is finalised. The 2023 Budget indicated that the COVID-19 Social Relief of Distress grant was only funded until March 2024.

“Government proposes that the fiscal framework make provision for funding for the grant for 2024/25. Beyond this, a comprehensive review of the entire social grant system by the Department of Social Development and the National Treasury is required,” Godongwana said.

Over the 2024 medium-term expenditure framework (MTEF) period, 61%  of consolidated non-interest spending goes to the social wage — combined public spending on health, education, housing, social protection, transport, employment and local amenities.

“Of this amount, R945.9 billion will be spent on social protection transfers, including the old age grant, the child support grant, the disability grant and the COVID-19 social relief of distress grant. South Africa’s social protection expenditure programme, measured as a percentage of gross domestic product (GDP), is one of the largest among developing countries,” he said.

The 2019 MTBPS noted that by 2040/41, social assistance beneficiaries – excluding the temporary COVID-19 social relief of distress grant – were projected to increase to 22.5 million, necessitating spending on social grants amounting to 3 % of GDP annually.

“This is in line with current grants spending, excluding the temporary grant. If that or a similar type of new grant is made permanent, beneficiaries are projected to expand from 27.3 million in 2023/24 to 40.4 million in 2040/41, which will cost 3.8 % of GDP in 2040/41 and require a corresponding permanent source of funding, such as additional revenue measures,” he said.

Education

Although additional funding has been provided to implement the 2023 public-service wage agreement, provincial education departments are constrained in hiring additional teachers.

The Minister warned that this could lead to larger class sizes and higher learner-teacher ratios, possibly resulting in weaker educational outcomes.

“To mitigate this, the sector will improve the approach to allocating teachers to schools, ensure that learner and teacher support materials are used cost-effectively, manage infrastructure projects more tightly and focus on plans to catch up on lost teaching time,” Godongwana said.

Institutions in the post-school education and training sector, including the National Student Financial Aid Scheme, will need to bring their student enrolment and bursary allocations in line with their budgets.

Planned infrastructure spending will be brought in line with institutions’ ability to spend.

Continued health services

The Minister said the health sector is aiming to maintain service delivery amid budgetary constraints.

“While additional funding is provided to cover wage increases, baseline reductions are being implemented as part of fiscal consolidation. To minimise negative effects, the sector will need to improve efficiency in areas such as overtime payments, medical supplies and security services, and to delay infrastructure projects.”

The South African Law Reform Commission is finalising a report on legal reform to manage medico-legal claims, which constitute a significant financial risk.

“To address funding fragmentation for oncology services, allocations will be shifted from the national health insurance grant to the national tertiary services grant.

“A single grant is also proposed to consolidate the existing personal and non-personal services components of the national health insurance indirect grant. Funding is also redirected towards the Office of Health Standards Compliance to strengthen the Health Ombud,” the Minister said. –SAnews.gov.za

 

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Wed, 11/01/2023 - 14:07

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Read moreCOVID-19 social grant extended until 2025
1 November 2023

R350-a-month grant to be extended to March 2025

Location: News

Finance Minister Enoch Godongwana announces extension of Covid-19 grant

Read moreR350-a-month grant to be extended to March 2025
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