FUEL THE PAIN

FINANCE Minister Enoch Godongwana targeted motorists with an increase in petrol and diesel prices in order to address the gap left by the abandoned VAT hike.

Delivering his Budget speech at the Cape Town International Convention Centre yesterday, Godongwana said the VAT (Value Added Tax) will remain at 15 percent as their commitment to listening to South Africans.

But the general levy on fuel means mense will pay an extra 16 cents a litre every time you go to the pump.  

He says: “The reality, however, is that the decision to do away with the VAT increase, without a viable alternative source of revenue, significantly reduced our ability to fund additional government programmes and projects to the extent we had deemed necessary.”

The Minister said the budget supported sustainable finances, the social wage and investments in economic growth, adding: “This is not an austerity budget.”

Key takeaways from the budget include an increase in spending for health and education, the extension of the Social Relief for Distress (SRD) grant, with Economic Growth revised to 1.4 percent as government allocated R1.3 trillion to service debt.

The SRD grant, introduced at the height of the Covid-19 pandemic, will remain in place until March 2026 thanks to Department of Social Development funding to the tune of R844.4 billion.

The grant will continue at a value of R370 per month, while government continues to explore long-term options to replace the program.

R815.8bn was specifically allocated for social grants – which includes approximately 13.2 million child support grant beneficiaries and 4.3m recipients of the old-age grant.

The department remains one of the largest drivers of government expenditure due to the critical role it plays in reducing poverty and providing a safety net for vulnerable South Africans.

Over the medium-term expenditure framework (MTEF) period, the provincial health sector budget will total R845bn. An additional R20.8bn will be allocated over three years to employ 800 post-community service doctors, procure essential goods and services.

Godongwana said this increase would also help the sector deal with salary pressures that have led to understaffing, particularly in rural and high-pressure facilities.

One of the few measures put in place that was praised by opposition parties was additional R7.5 billion for the SARS to increase its effectiveness in collecting more revenue.

Mense, though were disappointed with no cuts to cabinet spending.

Godongwana noted that President Cyril Ramaphosa has undertaken to establish a committee to identify wasteful, inefficient and underperforming programmes.