Issue 46 | 28 February 2013
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“The 2013 Budget is presented in challenging times, but against the background of a new strategic framework for growth and development. This is a budget in which there is limited room for expansion, yet there are significant opportunities for change.”
  • Over the next three years, R827 billion will be spent by the fiscus and state-owned companies to build infrastructure. 
  • The fiscus has allocated just under R430 billion for schools, hospitals, clinics, dams, water and electricity distribution networks; electrification of over a million new homes; sanitation schemes; building more courtrooms and prisons; and improved bus, commuter rail and road links.
  • Eskom, Transnet and other state-owned companies fund a further R400 billion of projects. This will be financed both through own resources and additional borrowing over the next three years, supported by Treasury guarantees. This will pay for the ongoing building of power generation plants and new transmission lines; investment in rail, ports and pipelines; large new water transfer schemes; and various airport upgrades.
  • The Manufacturing Competitiveness Enhancement Programme, announced in 2012, has received a total of 215 applications with requests for grants totalling R2,3 billion mainly from the chemicals, metals and agroprocessing sectors. Applications are expected to increase over the period ahead and funding of R1,7 billion per year has been provided on the budget of the Department of Trade and Industry.
  • The Special Economic Zone Programme, announced in 2012, has received funding to build world-class industrial parks.
  • The Jobs Fund, announced in the 2011 Budget, has concluded two calls for proposals. In total, 3 614 applications have been received, and 65 projects approved. Grant funding of R3,3 billion has been approved, matched by a further R3,1 billion in funding raised by the private sector.
  • Small, medium and micro enterprises (SMMEs) play a key role in the development of the economy and are a significant generator of employment. Financing of SMMEs has been simplified with the creation of the Small Enterprise Finance Agency in 2012. Government has been progressively working to simplify the tax requirements for small business. The turnover threshold will be increased this year and the graduated rate structure will be revised.
  • Allocations for employment programmes will increase by 13,5% a year over the next three years.
  • There will be higher funding for employment projects of non-governmental organisations and for Working for Fisheries. The Expanded Public Works Programme aims to support 684 800 full-time equivalent jobs in 2013/14.
  • Additional allocations are also made for the sheltered employment factories of the Department of Labour, and to support the work of the Commission for Conciliation, Mediation and Arbitration.
  • Spending on education, sport and culture will amount to R233 billion in 2013/14.
  • Over the period ahead, the basic education sector will focus on improving numeracy and literacy, expanding enrolment in grade R and reducing school infrastructure backlogs. Together with the broader education infrastructure grant, R23,9 billion is available to provincial education departments for infrastructure over the next three years.
  • R700 million has been allocated over the Medium Term Expenditure Framework (MTEF) period for the Technical Secondary Schools Recapitalisation Grant. This will finance construction and refurbishment of 259 workshops and training of over 1 500 technology teachers.
  • Transfers to higher education institutions increase from R20,4 billion in 2012/13 to R24,6 billion in 2015/16. The total number of students enrolled in higher education institutions is expected to increase from 910 000 currently to 990 000 in 2015.
  • Funding has been allocated for the construction of new universities in the Northern Cape and Mpumalanga to commence this year.
  • Consolidated spending on health and social protection is R268 billion in 2013/14.
  • Health infrastructure remains a priority. In 2012, a total of 1 967 health facilities and 49 nursing colleges were in different stages of planning, construction and refurbishment.
  • Substantial improvements in the social assistance payments system are in progress, providing easier access by recipients to their grants. The cost of social grants payments has been reduced from R32 to R16 per disbursement.
  • The old age and disability grants will increase in April from R1 200 a month to R1 260.
  • The Foster Care Grant will increase from R770 to R800.
  • The Child Support Grant will increase to R290 in April and R300 a month in October.
  • The allocations for defence, public order and safety amount to R154 billion in 2013/14.
  • Provision is made for peace-keeping operations in the Central African Republic, where 400 defence force personnel have been deployed.
  • The Department of Police has reprioritised R2,5 billion over the MTEF to improve detective and forensic capability.
  • Expenditure on transport, energy and communications will amount to R89 billion next year.
  • The allocation to the Department of Transport increases from R42,3 billion next year to R53,4 billion in 2015/16, reflecting increased allocations to the Passenger Rail Agency for its rolling stock procurement programme and further investment in the national road network.
  • Additional funding goes to integrated public transport networks in urban areas, and for provincial road maintenance.
  • The Integrated National Electrification Grant is allocated additional funding to increase the number of new electricity connections by 645 000 over the next three years.
  • The Solar Water Geyser Programme will be continued until 2015/16.
  • Sentech will receive R599 million over the medium term for the migration from analogue to digital terrestrial television.
  • Africa now accounts for about 18% of South Africa’s total exports, and nearly a quarter of our manufactured exports.
  • Over the past five years, the South African Reserve Bank has approved nearly 1 000 large investments into 36 African countries.
  • South Africa is assisting to build infrastructure that will create opportunities for South African companies to expand trade and investment across the border.
  • The Development Bank of Southern Africa is accelerating investment into the Southern African Development Community region. South Africa is supporting infrastructure projects in multiple countries, particularly in the key areas of electricity generation and transmission, and in strengthening road links in the region.
  • Investment by the Industrial Development Corporation in 41 projects across 17 countries totalled R6,2 billion in 2012. The bulk of those projects are in mining, industrial infrastructure, agroprocessing and tourism.

In March, South Africa will host the fifth annual BRICS Summit, which brings together Brazil, Russia, India, China and South Africa. The summit will unveil the work South Africa has been doing with BRICS partners on the following projects:
    • The possible establishment of a BRICS-led bank is intended to mobilise domestic savings and co-fund infrastructure in developing regions.
    • The pooling of members’ foreign exchange reserves with the view of using them to support each other at times of balance of payments or currency crisis. Collectively, BRICS countries hold reserves totalling USD 4,5 trillion.
    • Work is underway on creating a trade and development insurance risk pool. The aim is to establish a sustainable and alternative insurance and reinsurance network for the BRICS countries.
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