SA Budget 2012: "DO MORE WITH LESS"

"DO MORE WITH LESS"

Pravin Gordhan, our Finance Minister, at SA's 2012 Budget Speech happening now:

Focus on PEOPLE in 2012: Ask what can you do for the Government and the People - not what the Government can do for you?

STATS:

- 43 infrastructure projects worth R3.2 trillion to be embarked on this year

- 32% of GDP will be spent next year: total spending to reach R1 trillion for the first time.

Bad News: Gauteng e-Tolling starts on April 30 :( capped at R550 monthly for frequent users...

"This world around us is changing causing discomfort with a power struggle looking - we as a developing nation need to seize the opportunity being a mining and agricultural country... gearing up for manufacturing jobs that will need to move out of China onto African shores..."

AFRICA TODAY:

Youthful, increasingly educated nation, urbanised and tech-savvy.

Government private sector collaboration challenges!

"Unregulated capitalism is in crisis."

How far will you get if you sit in your corner? (Zulu Proverb)

2030 VISION:

Agriculture

Manufacturing

Trade

"Don't burden future generations with debts generated through consumption."

DBSA more important role in strategic investment drive.

SA's development finance institutions well qualified to raise finance from state bodies, corporates and municipalities - something unique to South Africa.

Weaknesses in the State's infrastructure project capacity:

- only 68% of budget spent last year!

- how to fix it: 

         - planning, costing & project management; 

         - accountability to public infrastructure building & maintenance targets or lose allocations;

         - new technical assistance bodies to municipalities.

TAX RELIEF IS UNDER CONSIDERATION FOR BUSINESS!

R739 billion collected from taxpayers last year... (us Golden Gooses heading for the Abattoir)...

Revenue estimates & tax proposals:

Personal income tax relief to earners under R200k per year

New tax to medical schemes

Fairer Pension / Retirement Fund reform (2014)

Tax-exempt short-to-medium insurance products (up to R30k a year free of interest tax)

Tax income thresholds to be reviewed and reformed

Secondary tax on companies terminated on 30 March 2012

PAYE standard rate of 28% and max of 40% remain.

Capital Gains Tax change: 

- inclusion rate for individuals / family trusts 25% to 33.3%

- for companies up to 66.6%!

Tax relief for gap market: under R300k / RDP housing providers! "If u build ur employees houses, u could get a tax break!"

Carbon tax: Revised Policy Paper will go out for public consultation in 2012.

Solar water geysers will no longer be incentivised for consumers :( 

Excise duties increasing to under 500k aeroplanes, helicopters, boats, etc.

Tobacco - 5-8% increase in duties.

Alcohol - beer 10% increase (350ml) & spirits 20% increase over 2 years (750ml) & wine 8% increase (750ml).

NEW: Tax Ombud for difficulties not concluded by SARS!

Employment focal areas:

Community Works Programme to increase employees to 322 000

Water & fire environmental services

Youth programmes

Art & culture sector

Funny Tweet: "Minister Motsoaledi claps vigorously at the sin tax increases. He smiles. He's the only one that looks happy..."

COMMUNITY SUPPORT GRANTS INCREASE. 16.3 million people (more than a third of South Africans!!!)

Other focal areas:

Energy: demand side management

Alternative: township electrification; solar geysers; low voltage lights

Sentech: digital TV infrastructure

Rail system upgrades

Better waste water treatment

More RDP housing support - more needed from banks!

Funding to:

DBSA - R5.8bn & R3.2bn; SANParks, Nat Meteorology Institute, Fisheries & Agric; Agricultural Research Council (Mining & pharmaceuticals); Home Affairs for better border control.

National Health Insurance phased in over 14 years from 2012:

Discussed paper to be published by end April 2012.

NEW: R235 tax credit for medical scheme contributions for first 2 beneficiaries!

Gauteng Freeway Improvement Programme:

Government will get clever with debt restructuring to lower burden on road users.

eTag goes down 66c to 30c for light passenger vehicles.

Taxis will be exempted from paying toll fees.

Public transport upgrades touted... as well as new Legislation by Minister Transport... ?

New fiduciary movements:

Revised Financial Sector Charter by dti for public comment soon

Better liquidity standards for banks & insurers

Remove investment barriers

Reform retirement industry & encourage household saving

LOWER PRODUCT FEES esp for saving products!!!

FSB "Treating customers fairly" initiative getting more teeth

Growth:

SME financing a new dept of IDC (incl BEE & designated local supply)

Simpler tax on SMEs (only have to report twice a year across 3 areas... down from up to 18 times to only twice!)

 

And lots and lots of magnifying glasses, judgeteers and and energy to be put into tenderpreneurship, corporate price adjustment for Government contracts and other bribery, corruption & fraud practises, yay! Over n out.