His Excellency, the Deputy President, Mr. David Mabuza;The Governor of the South African Reserve Bank;Deputy President of the Governing Party, Honourable Paul Mashatile and leaders ofI am honoured to table the following documents before this House:
We are navigating this difficult environment with policies that support faster growth and address fiscal risks. Our pursuit of higher growth remains anchored on three pillars. Firstly, we are ensuring a stable macroeconomic framework to create a conducive environment for savings, investment and growth.
Global economic risks remain high, including those related to the ongoing war in Ukraine, and could impede growth if they materialise. The fiscal consolidation strategy we adopted several years ago has restrained growth mainly in consumption expenditure, and allowed us to use part of higher-than-expected revenues to reduce the deficit.
Mainly due to this Eskom debt relief, government debt will stabilise at a higher level of 73.6% of GDP and in 2025/26. This is three years later than anticipated in the 2022 Medium Term Budget Policy Statement. A growing economy is key to achieving this objective. Implementing growth-enhancing reforms is a crucial element of our growth strategy.To fast-track the implementation of these reforms, we initiated Operation Vulindlela, a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms by fostering collaboration and coordination across government, just over two years ago.
We are introducing new regulations to enable the accelerated rollout of telecommunications infrastructure. As part of this, during the MTBPS we announced that the government will take over a portion of Eskom’s debt. We are doing this for two reasons: Government will finance the arrangement through the R66 billion baseline provision announced in the 2019 Budget, and R118 billion in additional borrowings over the next three years.Honourable Members, the arrangement is accompanied by strict conditions to safeguard public funds. These conditions include:
More generally, the culture of non-payment, not only by municipalities but by all organs of state and individual household customers is concerning. From 1 March 2023, businesses will be able to reduce their taxable income by 125% of the cost of an investment in renewables. Changes to the Bounce Back Loan Guarantee Scheme are also proposed to incentivise renewable energy, rooftop solar, and address energy-related constraints experienced by small and medium enterprises.
Most importantly, it ensures that communities tied to high-emitting energy industries are not left behind, and are provided with new skills and new economic and employment opportunities. Madam Speaker, allow me to highlight a few of the shovel-ready projects approved through the Budget Facility for Infrastructure:
At the same time, we are looking at initiatives to leverage private sector resources in public infrastructure delivery. This is to strengthen state capacity to expand infrastructure delivery and to catalyse private finance.The interventions in supporting growth are critical to the health and sustainability of the economy.
Madam Speaker, our country is reaping the benefits of a more efficient and effective tax administration, that is building trust to increase voluntary compliance and boost revenue collections. To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs. This takes effect from 1 April 2023 for two years.
The brackets of the transfer duty table will also be increased by 10%, allowing properties below R1.1 million to avoid any transfer duty payments. Any withdrawals from the accessible “savings pot” would be taxed as income in the year of withdrawal. On illicit trade, over the past three years, SARS has taken several steps to enhance its effectiveness in combating illicit trade, particularly in tobacco.
Over the medium-term, more than 60 per cent of non-interest expenditure goes to the social wage, while spending on buildings and other fixed structures – such as roads and dams – will increase from R62 billion in current year to R104.2 billion in 2025/26.
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