Here’s your budget in a nutshell:
- Mboweni proposed a R160 billion cut to the state’s wage bill over three years to rein in SA’s rising deficit, which has angered the unions.
- Fuel price goes up - In a decision that will hit the poorest of the poor very hard, Mboweni announced a combined 25 cents increase to the two main fuel levies: 16 cents will be added to the General Fuel Levy bringing it to R3.63 on every litre of fuel, and nine cents will be added to the Road Accident Fund levy bringing it to R2.07 on every litre of fuel. Motorists will now pay R5.70 towards these two taxes alone, or about 35% on a litre of fuel.
- Sin taxes increase - The excise duties on dop en entjies have been raised to keep pace with inflation, Mboweni said, and were effective immediately.
The cost of a 340ml can of beer or cider would increase by 8c; a 750ml bottle of wine would increase by 14c; a 750ml bottle of sparkling wine would cost an extra 61c; and the cost of a bottle of 750 ml spirits, including whisky, gin or vodka, would increase by R2.89.
A box of 20 cigarettes would cost an extra 74c.
“In line with the department of health policy, we will start taxing heated tobacco products, for example hubbly bubbly. The rate will be set at 75% of the rate of cigarettes. Electronic cigarettes, or so-called vapes, will be taxed from 2021,” the minister said.
- Welfare grants increase - the old age, disability, and care dependency grants will increase by R80 a month to R1 860. The foster care grant will rise by R40 to R1 040 a month, while R20 will be added to the child support grant, to R445.
Mboweni told Parliament that changes in the way social grants are administered had yielded annual savings of R1 billion and this would help to fund the increases.
- Income tax relief - Mboweni said he had resisted calls to raise taxes, notably value-added tax (VAT), because mense were already feeling the pinch of an economy forecast to grow only 0.9 percent in 2020/21. Instead, the minister announced income tax relief on a sliding scale.
“Someone earning R10 000 a month will pay 10 percent less in tax. Someone earning R100 000 a month will pay about 1.5 percent less tax,” he said.
- Crime - the National Prosecuting Authority has received a shot in the arm after Mboweni allocated it R1.8 billion to fight gender-based violence.
- Health - The Department of Health received R19.9 billion to ramp up infrastructure projects for the National Health Insurance. The funds will be allocated over three years to build new hospitals and refurbish existing ones for the NHI.
President Cyril Ramaphosa previously said it was a travesty that R250 billion was spent by 20% of the population on private healthcare.
- State owned enterprises - SAA would again be thrown a lifeline at taxpayers’ expense. Government has allocated R16.4 billion to the national carrier. Meanwhile, Eskom is getting R230 billion over the next 10 years.