The South African budget speech 2011/2012, presented by Finance Minister Pravine Gordhan, did not hold many surprises. There are positives for the country with a strong focus on job creation, improving education and health systems.
● R10 billion for job creation, small enterprise development and youth employment;
● R10.4 billion for public transport, roads and rail infrastructure;
● R9.5 billion to increase enrolment at FET colleges and skills development;
● R8.2 billion for upgrading school facilities;
● R7.9 billion to improve primary health care, revitalise hospitals and combat HIV and Aids;
● R7.2 billion for human settlement upgrading, municipal services and water infrastructure;
|Taxable income (R)
||Rates of tax
|0 – 150 000
||18% of each R1
|150 001 –235 000
||R27 000 +25% of the amount above R150 000
|235 001 –325 000
||R48 250 +30% of the amount above R235 000
|325 001 –455 000
||R75 250 +35% of the amount above R325 000
|455 001 –580 000
||R120 750 +38% of the amount above R455 000
|580 001 and above
||R168 250 +40% of the amount above R580 000
|Rebates of Tax
|Primary R10 755
|Additional (Persons 65 and older) R6 012
|Below age 65 R59 750
|Age 65 and over R93 150
GDP for 2011 is expected to be 3.4 per cent, while 4.1 per cent is projected for 2012.
Headline inflation rate January 2011 is 3.7%. (Key findings: P0141 - Consumer Price Index (CPI), January 2011 ) The Finance Minister expects inflation to remain within the 3 – 6 per cent range, increasing to the upper end in 2013 tracking the strengthening economy. Increasing Oil and food price are a concern to consumers.
Forex, Rand Strength
The strength of the Rand in the past year has affected manufacturing and other business sectors. Measures to moderate the potential affect of capital inflows have been implemented.
Division of Revenue
With all the emphasis on the poor service delivery in many communities in South Africa, it is disappointing to see that municipalities will only receive less than 9 per cent of nationally raised revenue allocation.
“development first, and not dependence on welfare.” is the statement of the President emphasised by the Finance Minister. A budget to accelerate employment has been set.
Points that could affect us:
● Expanded public works, including community based projects, environmental and social programmes and maintenance of roads and infrastructure;
● Tax incentives for manufacturing, focus job creation;
● Small enterprise development initiatives, including a focus on employment activation;
Keep an eye on dividend tax proposed for April 2012.
In closing, there is stability and a long term growth path in the Finance Ministers plan, with high expectations. We will be affected positively and negatively in the next year by these decisions. More importantly, how can we affect the community around us, with the resources we have. We can assist by creating employment and helping those in need.
© 2011/02/23 Business Soul Accounting cc
Picture Insert: Sheldon Conway author