“Tighten your belts” – finance minister

A substantial loss in state income due to last year’s economic turbulence was the overriding theme for this year’s budget speech.

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Tax revenue for 2012/2013 was expected to be R16,3 billion below the 2012 budget estimate, due to weak economic growth during the second half of last year, disruptions in the mining sector and lower commodity prices. 

Finance minister Pravin Gordhan said that there was a definite revenue squeeze and that money must be managed better. “Our ambitions must be tailored to the available money we have. We are looking at all possible solutions to finance our projects and are looking around for excess money to utilise.”

“If revenue continues to fall then we will have to start looking at other sources of income. Although we must cut our expenditure we will not be imposing austerity measures.”

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Plans to boost the economy:

  • A youth employment incentive will be tabled this year
  • Support mechanisms for biofuel production will be introduced
  • The Department of Agriculture Forestry and Fisheries has been allocated R23,4 billion, an increase of 4,6% from last year.

You pay:

  • Overall increase of 23 cents per litre in fuel levies in April
  • Carbon tax implementation of R120/t of CO2 equivalent, effective 1 January 2015

You save:

  • R7 billion relief in personal income tax
  • Consumer price inflation will be 5,6% this year, reducing to 5,5% in 2014 and 5,4% in 2015.

Read the full story in the March 8, issue of FW.