SA Budget Overview Dr. Clive Coetzee General Manager: Infrastructure Management and Economic Services KZN Provincial Treasury Budget in Context of the SA Economy Budget in Context of the SA Economy – GDP (% pa) Budget in Context of the SA Economy – Unemployment (% pa) Budget in Context of the SA Economy – Inflation (% pa) Budget in Context of the SA Economy – Current Account Deficit (R’m) Budget in Context of the SA Economy – Household Debt (R’m) Budget in Context of the SA Economy – Confidence deficit Budget History and Dynamics % National government revenue as percentage of GDP % National government expenditure as percentage of GDP R millions Total loan debt of national government R millions National government deficit/surplus adjusted for cash-flows % Total net loan debt as percentage of GDP % National government deficit / surplus as % of GDP R millions National government expenditure: Interest R millions Net saving by general government R millions General Government: Current taxes on income and wealth % GDP Ratio of final consumption expenditure by General government to % General Government Services to GDP 18 17 16 15 14 13 12 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 % SA GDP with and without Government Services 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1996 -1.00 -2.00 -3.00 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Budget in Context of Current External Factors Budget in Context of External Factors Budget in Context of External Factors S&P Rating Moody's rating Fitch Rating SOUTH AFRICA CHINA BRAZIL INDIA RUSSIA BBB- AA- BBB- BBB- BBB- STABLE STABLE STABLE NEGATIVE NEGATIVE Baa1 Aa3 Baa2 Baa3 Baa1 NEGATIVE STABLE STABLE STABLE NEGATIVE BBB A+ BBB BBB- BBB Negative STABLE STABLE STABLE NEGATIVE 57.44 NEGATIVE 78.82 STABLE 50.73 STABLE 47.12 NEGATIVE 54.81 STABLE TE Rating Budget in Context of External Factors Fragile Five Current Account deficit to GDP Government Debt to GDP Inflation Rate Currency (1USD) GDP Growth Rate Interest Rate -4.17 56.8 7.7 3.05 -0.2 12.75 -1.7 67.72 5.11 62.21 7.5 7.5 -5.8 46.1 4.4 11.83 1.3 5.75 -7.9 33 7.55 2.61 1.7 7.5 -2.95 26.11 6.29 12900 5.01 7.5 Budget in Context of External Factors Budget in Context of External Factors Budget in Context of External Factors The 2015/16 Budget Table 1.2 Macroeconomic outlook – summary 2014 Estim ate 2015 2016 2017 1.2 2.0 Forecast 2.6 3.0 -0.6 2.2 3.4 3.8 Exports 0.9 3.3 4.6 5.0 Imports -0.3 4.6 5.3 5.5 Real GDP grow th 1.4 2.0 2.4 3.0 Consumer price inflation (CPI) 6.1 4.3 5.9 5.7 -5.8 -4.5 -4.9 -5.2 Real percentage grow th Household consumption Gross fixed-capital formation Current account balance (% of GDP) Table 1.3 Consolidated government fiscal framework 2014/15 R billion/percentage of GDP Revised estim ate Revenue 1 091.0 Expenditure Budget balance 2015/16 2016/17 2017/18 Medium -term estim ates 1 188.9 1 331.5 1 439.5 28.1% 28.4% 29.3% 29.2% 1 243.4 1 351.0 1 448.8 1 561.7 32.0% 32.2% 31.9% 31.7% -152.4 -162.2 -117.3 -122.2 -3.9% -3.9% -2.6% -2.5% Table 1.4 Summary of tax proposals R m illion Budget revenue (before tax proposals) Personal incom e tax Fiscal drag relief Rate increase in income tax Medical credits Business incom e tax Energy-efficiency savings tax incentive Taxes on property Adjustment in transfer duty Indirect taxes Increase in general fuel levy Increase in excise duties on tobacco products Increase in alcoholic beverages Tax proposals after fiscal drag 2015/16 (net): 2015/16 Budget estim ate 1 180 579 – -8 500 9 420 -920 -150 -150 100 100 8 325 6 490 602 1 234 8 275 Tax revenue (after tax proposals) 1 081 275 Budget revenue (after tax proposals) 1 188 855 Table 1.5 Consolidated government expenditure by function R billion Basic education 2014/15 2015/16 Revised estim ate 189.5 Budget estim ate 203.5 Average grow th 2014/15 – 2017/18 6.3% Health 144.6 157.3 7.1% Defence, public order and safety 163.0 171.2 5.7% 56.6 62.2 7.1% Economic affairs 189.4 206.2 6.0% Local development and social infrastructure 176.6 199.6 8.2% 64.7 64.4 2.6% 143.9 155.3 7.0% 1 128.4 1 219.6 6.5% 115.0 126.4 10.1% Post-school education and training General public services Social protection Allocated expenditure Debt-service costs Unallocated reserves Consolidated expenditure 1 – 1 243.4 5.0 1 351.0 7.9% Table 1.6 Division of revenue R billion National allocations 2014/15 491.4 2015/16 523.0 2016/17 553.8 2017/18 586.1 Provincial allocations 439.7 468.2 496.3 526.4 Equitable share 359.9 382.7 405.3 428.9 79.7 85.5 91.0 97.5 89.1 99.8 103.9 110.0 1 020.1 1 090.9 1 154.0 1 222.5 National 48.2% 47.9% 48.0% 47.9% Provincial 43.1% 42.9% 43.0% 43.1% 8.7% 9.1% 9.0% 9.0% Conditional grants Local government allocations Total allocations Percentage shares Local government Table 1.7 Projected state debt and debt-service costs R billion/percentage of GDP Net loan debt Debt-service costs 2014/15 1 584.0 2015/16 1 781.3 2016/17 1 958.1 2017/18 2 151.7 40.8% 42.5% 43.1% 43.7% 115.0 126.4 141.0 153.4 3.0% 3.0% 3.1% 3.1% Table 3.4 Consolidated operating and capital accounts, 2011/12 – 2017/18 2011/12 2012/13 Outcom e 2013/14 2014/15 Revised estim ate R billion OPERATING ACCOUNT 2015/16 2016/17 2017/18 Medium -term estim ates Current revenue 830.7 893.4 993.1 1 079.3 1 184.5 1 323.7 1 434.5 Current paym ents 838.6 921.1 1 010.9 1 095.6 1 181.4 1 261.9 1 334.1 Compensation 347.4 376.6 409.5 445.3 479.5 509.6 539.6 Goods and services 150.8 162.7 174.6 180.3 187.7 200.3 209.4 81.7 93.3 109.3 120.8 132.4 146.8 158.3 258.6 288.5 317.5 349.2 381.8 405.2 426.9 -7.8 -27.7 -17.8 -16.3 3.0 61.8 100.4 -0.3% -0.8% -0.5% -0.4% 0.1% 1.4% 2.0% 0.2 0.3 0.3 0.5 0.5 0.5 0.5 62.3 66.3 74.5 86.3 97.5 103.7 111.4 48.4 52.3 55.8 57.7 63.6 67.9 70.9 -110.5 -118.2 -130.1 -143.6 -160.6 -171.1 -181.8 -3.6% -3.6% -3.6% -3.7% -3.8% -3.8% -3.7% 8.2 10.1 10.6 7.5 0.4 7.0 4.2 – – – – 5.0 15.0 45.0 -110.1 -135.8 -137.2 -152.4 -162.2 -117.3 -122.2 -3.6% -4.1% -3.8% -3.9% -3.9% -2.6% -2.5% Interest payments Current transfers and subsidies Current balance Percentage of GDP CAPITAL ACCOUNT Capital receipts Capital payments Capital transfers Capital financing requirem ent Percentage of GDP Financial transactions 1 Unallocated reserves Budget balance Percentage of GDP Table 6.2 Provincial equitable share, 2015/16 – 2017/18 2015/16 2016/17 2017/18 Eastern Cape 54 312 57 368 60 069 Free State 21 757 22 775 23 979 Gauteng 73 413 78 237 83 602 Kw aZulu-Natal 82 254 86 885 91 430 Limpopo 45 377 48 121 50 502 Mpumalanga 31 030 32 971 35 113 Northern Cape 10 138 10 730 11 397 North West 26 151 27 676 29 493 Western Cape 38 242 40 501 43 308 382 673 405 265 428 893 R m illion Total Table 8.5 Guarantee exposure to major state-owned companies and development finance institutions, 1 2013/14 – 2014/15 R billion Total 2013/14 2014/15 2 Guarantee Exposure Guarantee Exposure 2 469.3 209.6 461.1 224.9 350.0 125.1 350.0 144.5 SANRAL 38.7 23.9 38.9 30.2 Denel 1.9 29.6 1.9 25.6 1.9 14.4 1.9 10.1 2.1 0.5 1.8 0.4 25.7 20.5 25.7 20.7 7.9 5.0 14.4 8.3 3.5 3.5 3.8 1.1 3.5 2.6 3.8 2.1 – 0.5 – 0.5 1.9 1.1 0.1 1.1 5.9 1.7 4.9 1.6 of which: Eskom Development Bank of Southern Africa Industrial Development Corporation Trans-Caledon Tunnel Authority South African Airways Transnet Land and Agricultural Bank of South Africa South African Post Office South African Express Airways Other 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12 2012/13 2013/14 Actual collections 2014/15 2015/15 2016/17 2017/18 Revised estimates Estimates Estimates Estimates illion es on income and profits Persons and individuals Gold mines Other mines Companies Secondary tax on companies/Dividend tax Tax on retirement funds Other 95 003.6 68 342.4 332.5 1 349.4 19 696.4 1 446.4 3 229.7 606.8 116 148.9 85 883.8 – – 20 971.6 3 149.9 5 330.4 813.1 147 310.4 90 389.5 – – 42 354.5 7 162.7 6 190.6 1 213.1 171 962.8 98 495.1 – – 60 880.8 6 132.9 4 897.7 1 556.3 230 803.6 125 645.3 – – 86 160.8 12 277.6 4 783.1 1 936.7 332 058.3 168 774.4 – – 140 119.8 20 585.4 285.4 2 293.3 359 044.8 205 145.0 – – 134 883.4 15 467.8 42.7 3 505.9 426 583.7 250 399.6 – – 151 626.7 21 965.4 6.7 2 585.3 457 313.8 275 821.6 – – 159 259.2 19 738.7 0.2 2 494.1 507 759.2 309 834.1 – – 177 324.3 17 308.8 – 3 292.0 556 700.0 350 000.0 – – 183 000.0 21 400.0 – 2 300.0 620 890.3 393 889.6 – – 202 032.1 22 483.8 – 2 484.7 678 651.9 433 842.2 – – 218 211.4 23 910.7 – 2 687.5 744 472.9 479 189.3 – – 236 690.7 25 677.1 – 2 915.8 – – – 0.1 0.1 – 2 717.3 2 717.3 – 3 896.4 3 896.4 – 4 872.0 4 872.0 – 6 330.9 6 330.9 – 7 804.8 7 804.8 – 10 173.1 10 173.1 – 11 378.5 11 378.5 – 12 475.6 12 475.6 – 13 200.0 13 200.0 – 14 690.0 14 690.0 – 16 140.0 16 140.0 – 17 800.0 17 800.0 – 2 618.4 17.7 302.6 442.3 1 855.8 – 3 808.4 15.2 304.2 1 090.4 1 821.6 577.0 4 628.3 20.6 481.9 1 212.8 2 913.0 – 6 707.5 17.1 417.1 1 101.1 5 172.1 – 11 137.5 29.5 624.7 1 973.4 8 510.0 – 11 883.9 27.6 691.0 3 757.1 7 408.2 – 8 826.4 60.1 759.3 3 324.0 4 683.0 – 7 817.5 52.7 1 045.2 2 886.1 3 833.6 – 8 645.2 82.1 1 013.0 3 271.9 4 278.3 – 10 487.1 112.8 1 101.5 3 784.3 5 488.5 – 12 602.7 172.4 1 430.3 4 300.0 6 700.0 – 13 691.7 186.2 1 545.2 4 645.4 7 314.9 – 14 822.6 199.6 1 670.2 5 027.1 7 925.7 – 16 088.8 213.7 1 811.7 5 456.0 8 607.4 – 60 619.0 40 095.6 7 425.8 581.6 12 091.2 – – 424.8 72 184.7 48 376.8 8 886.1 584.3 14 289.8 – – 47.6 86 885.1 61 056.6 9 797.2 776.1 14 923.2 296.4 – 35.5 110 108.6 80 681.8 11 364.6 1 016.2 16 652.4 367.2 – 26.5 151 223.7 114 351.6 14 546.5 1 157.3 20 506.7 458.2 – 203.4 194 690.3 150 442.8 18 218.4 1 480.5 23 740.5 540.6 – 267.5 203 666.8 147 941.3 21 289.3 1 275.9 28 832.5 580.3 3 341.7 405.7 263 949.9 191 020.2 25 411.1 1 828.3 36 602.3 762.4 6 429.7 1 895.8 296 921.5 215 023.0 28 377.7 2 231.9 40 410.4 873.1 7 983.9 2 021.4 324 548.2 237 666.6 29 039.5 2 363.3 43 684.7 878.7 8 818.9 2 096.5 355 717.9 260 600.0 32 000.0 3 231.7 48 200.0 966.3 8 600.0 2 119.9 389 427.3 283 793.6 34 483.3 3 491.2 55 666.0 1 043.9 8 774.1 2 175.1 422 378.1 313 689.5 35 390.8 3 782.3 57 130.7 1 130.4 9 004.5 2 249.9 458 883.3 346 711.0 36 428.2 4 101.1 58 807.4 1 226.8 9 268.5 2 340.3 es on international trade and transactions Customs duties Import surcharges Other 5 638.6 6 055.7 -1.4 -415.7 6 778.1 6 517.8 0.4 259.9 8 680.1 8 632.2 0.5 47.5 8 414.3 8 479.4 – -65.1 18 201.9 18 303.5 – -101.6 27 081.9 26 469.9 – 612.0 19 318.9 19 577.1 – -258.3 34 121.0 34 197.9 – -76.9 39 549.1 38 997.9 – 551.2 44 732.2 44 178.7 – 553.4 40 779.4 39 900.0 – 879.4 42 575.8 41 660.0 – 915.8 47 206.8 46 191.9 – 1 014.9 52 466.0 51 338.1 – 1 128.0 mp duties and fees 1 483.8 1 618.9 1 767.2 1 360.1 792.8 557.1 49.5 -2.9 0.5 31.7 – – – – es on payroll and workforce Skills development levy Payroll levy es on property Donations tax Estate duty Securities transfer tax Transfer duties Demutualisation charge mestic taxes on goods and services Value-added tax Specific excise duties Ad valorem excise duties General fuel levy Air departure tax Electricity levy Other Table B.1 Public-sector infrastructure expenditure and estimates, 2011/12 – 2017/18 2011/12 R billion 2012/13 2013/14 Outcom es 2014/15 2015/16 2016/17 Estim ates 2017/18 MTEF Total Energy 67.1 75.1 69.5 69.2 71.1 56.0 39.2 166.3 Water and sanitation 19.2 22.6 26.2 34.8 37.3 39.8 40.3 117.4 Transport and logistics 70.1 69.5 76.4 93.7 104.3 113.5 121.4 339.2 Other economic services 11.5 8.9 11.8 17.5 15.4 15.5 14.7 45.6 Health 7.7 9.7 10.6 9.7 9.3 9.9 10.3 29.5 Education 7.8 9.8 12.3 13.5 14.5 14.5 14.8 43.7 15.7 2.8 10.7 4.4 10.3 4.0 11.5 3.9 10.6 4.5 11.3 5.2 11.6 5.5 33.5 15.2 6.5 6.9 5.8 8.6 6.9 7.7 8.2 22.7 208.3 217.7 226.9 262.4 274.0 273.3 265.8 813.1 Other social services Justice and protection services Central government, administration services and financial services Total National departments 6.6 9.6 10.6 11.2 13.8 16.0 15.4 45.3 Provincial departments 43.4 36.4 39.5 44.0 45.0 47.7 47.4 140.1 Local government 33.2 41.7 47.1 58.3 55.9 59.0 62.0 177.0 Public entities 1 15.4 14.1 13.0 27.5 26.1 26.0 26.9 79.0 Public private partnerships 10.7 2.6 3.0 3.1 2.9 3.3 3.4 9.7 98.9 208.3 113.4 217.7 113.7 226.9 118.3 262.4 130.1 274.0 121.3 273.3 110.7 265.8 362.2 813.1 State-ow ned companies Total 1 Table B.3 Infrastructure nature of investment, 2011/12 – 2017/18 Nature of investm ent R m illion Departm ental infrastructure 2011/12 2012/13 2013/14 Audited outcom e Prelim inary e 6 451.0 9 314.8 outcom 9 005.7 2014/15 2015/16 2016/17 Estim ates 2017/18 11 213.9 13 817.2 16 003.8 15 447.2 2 752.7 4 212.2 4 641.2 6 377.7 7 500.4 8 920.5 8 511.6 Maintenance and repairs 328.3 191.0 437.4 648.1 620.5 578.5 805.5 Upgrading and additions Rehabilitation and refurbishment 2 964.3 3 640.5 3 266.2 3 562.7 4 414.7 4 892.9 4 378.1 405.7 1 271.0 660.9 625.5 1 281.6 1 612.0 1 752.0 83 463.6 84 268.0 90 508.1 107 762.6 113 764.2 119 955.5 126 536.4 189.4 398.2 384.6 555.8 318.4 318.1 338.1 83 274.2 83 869.8 90 123.5 107 206.9 113 445.8 119 637.4 126 198.3 89 914.6 93 582.7 99 513.8 118 976.6 127 581.4 135 959.3 141 983.6 New infrastructure assets Infrastructure transfers Current Capital Total Table 7.1 Ownership of domestic government bonds, 2009 – 2014 Percentage of total Non-residents 2009 13.8 2010 21.8 2011 29.1 2012 35.9 2013 36.4 2014 36.0 Residents 86.2 78.2 70.9 64.1 63.6 64.0 Pension funds 39.9 36.5 33.0 29.8 29.1 31.7 Monetary institutions 18.3 17.7 16.3 17.0 14.6 14.7 Insurers 12.4 14.1 11.6 9.4 8.6 8.2 Other financial institutions 13.2 8.1 8.0 5.8 8.2 8.7 2.4 1.8 2.0 2.1 3.1 0.7 Other Table C.4 Annual income tax payable, 2015/16 (taxpayers below age 65) Taxable incom e (R) 2014/15 rates (R) Proposed 2015/16 rates (R) Tax change (R) % change 85 000 2 574 2 043 -531 -20.6% 90 000 3 474 2 943 -531 -15.3% 100 000 5 274 4 743 -531 -10.1% 120 000 8 874 8 343 -531 -6.0% 150 000 14 274 13 743 -531 -3.7% 200 000 25 056 24 191 -865 -3.5% 250 000 37 556 37 191 -365 -1.0% 300 000 51 421 50 986 -435 -0.8% 400 000 82 549 82 326 -223 -0.3% 500 000 117 549 118 326 778 0.7% 750 000 213 247 215 297 2 050 1.0% 1 000 000 313 247 317 797 4 550 1.5% The main tax proposals include: • Increasing marginal personal income tax rates by one percentage point for all taxpayers earning more than R181 900, and adjusting tax brackets and rebates to account for fiscal drag • Raising the general fuel levy by 30.5 c/litre and the Road Accident Fund (RAF) levy on fuel by 50 c/litre (a total increase of 80.5 c/litre) • Taking further steps to combat base erosion and profit shifting • Providing for a more generous turnover tax regime for small businesses • Increasing excise duties on alcohol and tobacco products • Reviewing the diesel refund scheme • Strengthening the energy-efficiency savings incentive • Raising the electricity levy • Changing transfer duty rates and brackets. Baseline expenditure reductions of R25 billion over two years: • Reductions to current spending by national departments of R2.3 billion in 2015/16 and R3.9 billion in 2016/17, to be achieved mainly through decreases in budgets for non-core goods and services. • Reductions to capital spending of national departments by R280 million (2015/16) and R911 million (2016/17), mainly on non-critical items of machinery and equipment. • Reductions in allocations to public entities of R2.4 billion (2015/16) and R2.6 billion (2016/17). • Reductions in transfers to provinces of R4.4 billion (2015/16) and • R6.6 billion (2016/17). • Reductions in conditional allocations to local government of R921 million in 2015/16 and R1.4 billion in 2016/17. Country Name Macao SAR, China Algeria Denmark Seychelles New Zealand Norway Malta South Africa Cyprus United Kingdom Jamaica Luxembourg Belgium Georgia Morocco Botswana St. Lucia Namibia Switzerland Japan United States Spain Ethiopia Pakistan South Asia Afghanistan India Bangladesh Central African Republic 2001 2002 2003 2004 2005 2006 17.27 18.13 20.86 22.07 21.63 28.78 25.26 28.86 26.88 28.64 26.14 28.47 27.93 24.81 40.46 27.14 24.20 41.15 26.04 24.95 26.39 7.35 24.60 25.38 7.62 19.93 28.75 32.73 29.52 26.31 56.54 24.00 43.66 25.21 24.46 24.61 24.77 7.03 19.64 30.00 27.02 29.52 27.81 60.41 25.33 42.82 25.45 25.12 24.31 25.28 9.93 19.87 31.76 27.36 30.56 28.73 60.77 26.86 45.44 25.76 25.34 25.68 25.36 12.11 21.97 22.17 26.40 22.39 25.98 21.45 23.18 22.50 24.29 22.84 25.76 9.16 9.17 9.18 12.03 15.55 8.08 10.04 8.33 10.01 12.58 9.71 10.31 8.79 9.49 11.79 9.12 10.78 9.18 9.60 11.95 9.68 10.28 9.51 9.38 10.54 10.76 12.60 8.72 9.60 9.87 7.94 7.60 8.53 7.70 8.95 8.07 9.41 8.11 9.91 8.22 2007 2008 2009 2010 2011 2012 21.58 40.75 30.62 24.61 32.37 29.40 63.52 28.38 47.71 26.46 26.14 24.61 25.04 15.45 22.43 26.93 22.49 29.15 26.01 37.43 34.88 23.58 30.53 28.61 65.90 28.87 54.14 26.24 27.00 25.04 24.37 17.72 25.12 25.71 22.78 27.56 30.67 45.25 33.94 22.48 32.17 28.26 27.19 28.15 51.02 27.30 27.27 24.90 24.73 23.81 27.57 26.96 24.70 30.27 29.68 35.14 33.32 25.24 31.32 26.29 27.82 25.41 25.77 24.45 27.16 25.62 23.32 23.14 23.97 27.72 24.26 29.61 34.25 34.40 32.89 27.75 28.20 27.23 27.01 25.74 25.87 25.18 26.54 25.23 23.89 22.14 23.43 21.96 23.10 21.71 37.64 37.36 32.98 31.68 28.30 27.80 26.45 25.95 25.85 25.79 25.70 24.68 24.01 23.83 23.80 23.65 23.45 23.11 9.48 10.93 11.45 13.16 8.26 8.75 10.57 6.88 11.03 7.04 9.31 10.47 11.49 13.51 7.81 9.23 11.36 5.23 11.89 6.92 9.96 9.28 10.03 10.15 7.81 9.49 10.47 6.04 10.75 7.66 8.28 9.82 8.70 8.21 8.34 6.58 8.94 9.53 8.43 9.64 7.50 8.22 9.63 9.14 8.82 11.05 8.16 9.98 10.12 9.12 10.19 7.83 9.06 9.76 9.76 9.70 9.35 9.21 9.19 8.97 8.85 8.80 8.69 8.36 Tax revenue (% of GDP) 36.98 33.40 31.21 29.27 27.29 27.02 26.50 25.49 25.29 27.07 25.53 24.86 24.12 24.49 27.13 23.04 10.09 10.21 7.08 10.10 10.63 7.47 10.66 9.46
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