Gigaba to deliver maiden Budget speech amid speculation of axing


With a budget shortfall of R50 billion and government juggling numbers to find R40 billion for free tertiary education, compounded by the economy only growing at an uneasy 1%, the finance ministry will need to resort to tax increases to try and balance the books, without increasing government debt.

Al Jazeera's Fahmida Miller has more from Johannesburg.

With that said, follow the speech live on YouTube from 2pm below.

In line with government's new dawn direction to ensure all South Africans are participants in the economy and can expect a better life, the largest slice of the R1.67-trillion budget goes to social services, which account for R1.01-trillion.

Tabling the Budget in Parliament, Gigaba stated that as government was still faced with a revenue gap of R48.2-billion, a number of significant changes had to be made to meet the this increased allocation, with new tax measures being implemented to raise an additional R36-billion in 2018/19. The announcement, while welcomed by many following violent #FeesMustFall protests at universities, was largely criticised as populist because it came at a time when Zuma was under siege at the ANC national conference and no prior costing had been done.

"Government proposes to increase these rates, which are already applied to some goods that are consumed mainly by wealthier households (such as cosmetics, electronics and golf balls)", the review said.

VAT is one of the most efficient forms of tax collection and is broad-based, also capturing most forms of consumption as well as including some revenues earned in the informal sector. Returning NSFAS students at university will have their loans for 2018 onwards converted to a bursary.

Child support grants for 12.8 million people will increase from the baseline of R380 to R400 on April 1 and to R410 on October 1.

And R6-billion was found for drought relief and related public infrastructure development. "We have among the highest levels of per capita daily domestic water consumption levels in the world, but also some of the highest levels of inequality in reliable access to water", the Finance Minister told MPs.

"This is a tough, but hopeful budget", Gigaba said, as reported by Reuters.

The budget also included spending on education, rising to 13.7% annually - the fastest growing spending category.

Meanwhile, Treasury projects inflation to come in at 5.3% in 2018. Workers are not the ones who have looted Eskom, SAA and the state. Analysts forecast this year's growth will jump to 1.8 percent.

Finance Minister Malusi Gigaba wasn't answering questions about his future on Tuesday and left it up to his deputy to speak for him.